FamPay, an Indian fintech aimed at teenagers, raises $38 million
FamPay, an Indian fintech aimed at teenagers, raises $38 million
How big a market is there in India for a neobank geared toward teenagers? Numerous prominent investors are investing in a startup to find out.
FamPay, headquartered in Bangalore, announced on Wednesday that it had raised $38 million in a Series A round led by Elevation Capital. General Catalyst, Rocketship VC, and Greenoaks Capital, as well as existing investors Sequoia Capital India, Y Combinator, Global Founders Capital, and Venture Highway, participated in the new round, bringing FamPay's total funding to $42.7 million.
The new investment represents one of the largest Series A rounds in India in terms of size. Early this month, TechCrunch reported that FamPay was in talks with Elevation Capital to raise a new round of funding.
What is FamPay
FamPay headquartered in Bangalore, enables teenagers to make online and offline payments. It was founded by Sambhav Jain and Kush Taneja (pictured above), who both graduated from the Indian Institute of Technology, Roorkee in 2019.
The startup's mission, Jain explained in an interview with TechCrunch, is to instill financial literacy in teenagers, who also face limited opportunities to open a bank account in India at such a young age. The startup claims that through gamification, it is making money lessons enjoyable for children.
Unlike in the United States, where it is common for teenagers to work in restaurants and other establishments and learn how to manage money at an early age, this tradition does not exist in India.
After obtaining parental consent, FamPay provides teenagers with an app for online purchases and plastic cards — the country's only numberless card — for offline transactions. Parents can fund their children's FamPay accounts and keep track of large-ticket purchases.
While a number of startups, including Greenlight, Step, and Till Financial, are vying to serve teenagers in other markets, such as the United States, there is currently no startup addressing the financial access problem for teenagers in India, according to Mridul Arora, a partner at Elevation Capital, in an interview with TechCrunch.
It may prove to be a worthwhile endeavor — India has the world's largest adolescent population.
“If you can serve them at a young age, you have a chance to become their go-to product for a variety of things,” Arora explained. “FamPay caters to a population that is both attractive and underserved.”
FamPay's Current Offerings
FamPay's current offerings are only the beginning, according to Jain. Eventually, the startup hopes to offer a variety of services and act as a neobank for children, he said, though he declined to elaborate on what those services might be.
Teens are the “most technologically savvy generation, having never known a world without the internet,” he explained. “They adapt to technology more quickly than any other demographic, and their first exposure to the internet comes via apps like Instagram and Netflix. This results in increased expectations of the products they prefer to use. We are unique in our approach to banking, with our recipe of community and gamification that is tailored to the Gen Z vibe.”
“I do not view FamPay solely as a payment service. If the team is successful in executing this, FamPay has the potential to become a very powerful gateway product for Indian teenagers and their financial lives. It has the potential to become a neobank, and it also has the potential to engage in social, community, and commercial activities,” Arora explained.
Jain and Taneja collaborated on an app during their college years and worked at a variety of startups, including social network ShareChat, logistics firm Rivigo, and video streaming service Hotstar. Jain explained that their early work with startups sparked the idea to explore a future in this ecosystem.
Prior to joining FamPay, Jain stated that the duo considered several additional startup concepts. The early stages of FamPay were particularly difficult for the founders, who had to convince their parents that they should pursue entrepreneurship rather than joining firms or startups, as the majority of their peers from college had done. Until he was accepted into Y Combinator, Jain admitted that he was unfamiliar with cap tables and dilutions.
He expressed gratitude to entrepreneurs such as Kunal Shah (founder of CRED) and Amrish Rau (CEO of Pine Labs) for their generosity with their time and guidance. Additionally, they wrote some of the earliest startup checks.
The startup, which has over 2 million registered users, intends to use the additional funding to grow its user base and product offerings, as well as hire engineers. It is also recruiting members of its leadership team, according to Jain.
Courses and Certification
Fintech - Financial Technology Course and Certificate
E-Accounting Course and Certificate
Advanced Excel Course and Certificate
Microsoft Excel Course and Certificate
QuickBooks Course and Certificate
