Companies like AssetPlus, ZFunds and Wealthy are building digital tools that streamline operations for MFDs, which help investors choose, buy, and manage mutual fund schemes, while earning a commission from the fund houses. The startups offer everything from client dashboards and UPI-based payments to handling recurring SIPs and compliance, allowing distributors to scale faster and reach investors beyond major metro areas.
AssetPlus, a Chennai-based startup backed by Zerodha’s Rainmatter and InCred, is in talks to raise a $20 million funding round from new and existing investors, according to two people familiar with the matter. The company previously secured $6 million from Fidelity’s Eight Roads Ventures in late 2024. Other players which have also attracted capital include ZFunds which raised $3 million from Elevation Capital and PB Fintech chief executive officer (CEO) Yashish Dahiya in December; and Wealthy which secured about $5.5 million from Alpha Wave last May.
Rising investor interest coincides with a surge in MFDs. The number of individual distributors jumped 24% to 29,555 last fiscal year, hitting a five-year high, fueled by soaring assets under management and aggressive campaigns by the Association of Mutual Funds in India (Amfi). Top-tier distributors—those managing at least ₹100 crore in assets—climbed to 3,158 from 2,499 in the previous year, collectively overseeing ₹25.35 trillion in AUM.
AssetPlus co-founder and CEO Vishranth Suresh declined to comment on the funding specifics.
“The system is broken,” said Aditya Agarwal, founder of Wealthy. “Banks and direct-to-consumer apps don’t offer personalized guidance. MFDs don’t have the tracking tools to serve users at scale.”
Manish Kothari, CEO of ZFunds, said the median age of mutual fund investors has dropped sharply since 2019, with more 30-somethings entering the market with disposable income. “As they get younger, the need for tech increases. As they get wealthier, the need for advice increases,” he said. The new platforms, he argues, combine technology with the human touch of a distribution network.
In the last five years, the industry added over 100,000 individual MFDs and 225,000 total distributors, including others such as corporate MFDs, private limited or partnership firms, and EUIN holders (employees of banks, national distributors or other MFDs). Overall, the industry has 178,000 distributors, including 162,000 individual MFDs.
Birendra Sharma, a Raipur-based mutual fund distributor and founder of wealth management firm Gullak, said the use of some tools like a unified client dashboard has helped make KYC updation easier–a process that would earlier require several days and multiple intermediaries. Sharma now manages nearly 1,200 clients, up from 300 six years ago, with a majority of them sitting out of tier-III towns like Motihari in Bihar and Bilaspur in Chattisgarh.
Varun Krishnan, another distributor based in Bengaluru, said that he now finds it easier to manage the diverse portfolio needs of different clientele by using customization tools. “Distributors are a fairly small group and these platforms engage routinely with us to get feedback. Some very complex problems like documentation of NRI clients are much easier today,” Krishnan told Mint.
However, adoption remains fragmented, and it will likely take considerable time before small-town distributors are fully digitized, according to Sharma. “Since a lot of them handle regional clients, they’re familiar and more comfortable with the traditional route like client onboarding on paper and in-person meetings for folio planning.”
One key reason for the rising interest is the stellar market performance of Prudent Corporate Advisory, backed by Singapore’s Temasek. The company has emerged as a bellwether for investor interest in the MF distribution and advisory space. Since its May 2022 market debut at ₹650 apiece, its shares have quadrupled, closing at ₹2884.60 on Monday, reinforcing long-term growth visibility for the sector. Last year, it agreed to acquire Indus Capital’s mutual fund distribution business for ₹123.75 crore.
The renewed interest comes as other financial giants, including Groww, Cred, and PB Fintech, double down on wealth management as a core part of their strategy. The growing demand for personalized financial plans is a key driver.
Wealthy works with 6,000 MFDs serving over 100,000 clients and has digitally managed $720 million in AUM over the last year.
Meanwhile, AssetPlus is targeting first-time MFDs, who are more likely to adopt new technology. “Newer MFDs show higher technology adoption because they understand that scale is more achievable with digital tools than without them,” said Suresh. With two-thirds of its MFDs in smaller cities like Coimbatore and Mysuru, AssetPlus is betting on rapid growth in India’s fast-expanding “B30” towns, which now account for 19% of the country’s total mutual fund AUM.