After a successful stint in sell-side research and institutional equities, Pradip Seth realised mid-sized companies often didn’t have consistent investor relations and that investor interactions were meant only to raise capital.
Outreach between the corporates, buy-side, and sell-side is the biggest challenge for most companies. Spotting an opportunity here, Pradip founded S-Ancial in 2015. The Mumbai-based fintech startup is a data intelligence platform focused on equity capital markets, specifically on investor relations.
“We help listed companies with better investor targeting, disclosures, compliance, including ESG and sustainability, solutions, and automated services,” says Pradip.
On Friday, the startup announced it has raised $1.4 million pre-Series A funding led by JITO Angel Network. The round also saw participation from Rahul Mehta of DST Global, Suresh Jain of Sun Capital, Rank Group, and other marquee angels.
The startup said it will be using the funds to expand its India and MENA footprint and strengthen its technology platform ExchangeConnect, which brings together listed companies, buy-side investors, and sell-side brokerages.
Building ExchangeConnect
ExchangeConnect offers tools and services to conduct ownership and peer analysis, get corporate access, manage events, create and implement ESG reports, and provide pre-IPO support, among others.
Pradip says, listed companies can tell their stories more efficiently and identify new target investors to boost market valuations and trading volumes. They can also buy integrated, customised, and value-add solutions through the platform.
“We realised the next big idea for the capital market stakeholders would be to digitise the entire market process and make it scalable, resulting in magnificent network growth. And that’s where the concept of ExchangeConnect evolved,” he says.
The MiFID II, instituted by the European Union (EU) in 2018, further highlighted these challenges, and the scenario demanded an innovative solution. “It took our in-house team three years to develop the platform to the current scale. We have spent close to $3 million to date on the platform to build and scale,” says Pradip.
Commenting on the investment, Suresh Jain from JITO Angel Network said, “We found ExchangeConnect to be a powerful missing link in the capital market ecosystem. The platform is a source of highly structured data in a ready-to-grasp format: a gold mine for the entire capital market spectrum. It fits into JITO investment’s mantra of a disruptive tech-enabled service product that solves a major problem in the capital markets. I am excited to represent investors and give my 20 plus years of experience to ExchangeConnect going ahead.”
The product
The startup offers free and premium tools for listed companies. The ownership analysis tool helps clients with detailed profiling of shareholders along with activities of buyers and sellers on their stock. The investor targeting tool helps to find and connect with the most optimal set of institutional investors.
Pradip explains, companies have been able to gain leads to their ideal institutional shareholders. The ownership analysis and perception study tool have been effective in improving the perception of its clients as they gain valuable feedback from the buy-side and sell-side.
Companies can also create and manage events like roadshows within the platform and live-stream them through an in-built webinar tool.
Since ExchangeConnect brings together all the market stakeholders, the companies get better sell-side analyst coverage and maximum outreach to any part of the market through the platform, explains Pradip.
In addition to this, the co-founder says, ExchangeConnect helps companies achieve better corporate governance and enhanced disclosures. The premium tools help companies get a fair valuation in the market as well. The platform also offers tools to boost networking opportunities for companies with the buy-side and the sell-side, and helps lower communication costs.
“EC Design Lab, an extension to the ExchangeConnect platform, is an intelligent plug-in that accelerates and simplifies the process of ordering collaterals. The projects are jointly handled by a team of expert analysts, developers, writers, and designers. Users can set project parameters while ordering documents like presentations, annual reports, websites, and more, and then track progress in real-time,” says Pradip.
The team
S-Ancial initially started as a boutique consultancy company. Pradip says they evolved over time by understanding the need of the equity capital market and found their sweet spot. Once Pradip started S-Ancial, he was introduced to Dr Shailendra Mehta through a mutual friend, who joined in as the co-founder.
Pradip is a Delhi, Oxford, and Harvard University-educated Economist and Professor of Strategy. Shailendra is the President and Director of MICA, a widely known B-school. Before MICA, he headed the Auro and Ahmedabad Universities and was at Purdue University for 16 years, where he taught Economics and Strategic Management.
The core team also comprises Pankaj Sharma, who has spent most of his time in Indian Capital Markets. The startup is present in India and Singapore with a total team size of 31.
Numbers and differentiator
The startup has over 175 listed companies on the platform and a significant number of buy-side institutions and sell-side brokerage houses. Its current user base is close to 2,500 and is growing at a monthly rate of 10 percent since the last few months.
S-Ancial competes with the likes of online brokerage firm Zerodha and investment firms like Groww and UpsideAI.
The fintech platform, which works on a freemium model, offers many tools for free, and it charges only for the premium features. Pradip says their pricing is economical compared to premium peer workstations.
“We offer many unique tools compared to our peers. Companies can order their documentation like investor presentations, annual reports, and press releases on the design lab tool. The EC Design Lab is geared to develop collaterals that are fine-tuned to the needs of the users,” adds Pradip.
“ExchangeConnect is on its way to democratise the corporate solutions platform on the back of its cost-effective solutions. We are a better option in terms of cost and services offered. We provide companies with the control over selecting the kind of investors they would like to meet,” says Pradip.
