Rainmatter Capital, Zerodha's investment arm, has invested in the Series A funding round of Capitalmind Financial Services, a SEBI-registered portfolio manager. 

This is Capitalmind's first institutional funding round and it comes after the launch of its mutual fund business, it said.

Notably, Capitalmind’s founder Deepak Shenoy was an early advisor to Zerodha.

"(Hence) This move formalises a 15-year relationship between Zerodha’s founder Nithin Kamath and Capitalmind’s founder Deepak Shenoy," it noted.

Nithin Kamath, founder and CEO of Zerodha and Rainmatter, said that the investment firm's stake in Capitalmind is capped at 10%, and it will not have a board seat in the company, in line with SEBI's regulation.

Capitalmind has two core businesses. Its recently launched mutual fund business will focus on creating innovative, scalable asset management products for a broad retail audience.

Capitalmind's PMS (Portfolio Management Services) division will improve its focus on providing holistic asset allocation for high net worth individuals (HNIs) and ultra high net worth individuals (UHNI), primarily using baskets of mutual funds to offer consolidated guidance with the tax efficiency of the MF structure. 

"This PMS strategy already manages over Rs 450 crore in such baskets," it added.

Rainmatter's notable investments include Cred and Smallcase.