FamPay, a fintech startup aiming to build India’s first neo-bank for teenagers, has announced the fundraise of $38 million Series A, led by Elevation Capital and major participation from existing investor Sequoia Capital India. Other early investors have also participated in the round.
The Bengaluru-based fintech startup had in March raised a $4.7Mn seed funding round from Y Combinator, Venture Highway, Sequoia India and Global Founders Capital (GFC).
The company, which has crossed 2 Mn registered users within just 8 months of its launch, says it has been averaging 100% month on month growth. FamPay will use the latest round of funding to build their leadership team to further fuel growth.
Founded by recent graduates of Indian Institute of Technology (IIT) Roorkee, Kush Taneja and Sambhav Jain, FamPay is currently building a payments network which will specifically cater to teenagers in India. During their college years, Taneja and Jain realised that banks or schools aren’t doing much for students to teach them personal finance. To tap this segment, the founders decided to launch a financial product which will cater to Indian teenagers.
With FamPay, anyone can get a debit card without the need to set up a bank account. Using this card, anyone can pay for products and services both online and offline. Parents can top up the FamPay account of their children and let them spend the way they want but under supervision. Users can also send money through UPI on the mobile app.
Teens can enable FamPay after their parent’s consent and start making payments without the need to set up a bank account. All the card details can only be accessed through the FamPay App and are device lock protected. In addition to payment products, FamPay also offers gamified savings experiences and an in-app exclusive community to help teens learn, earn and grow
Kush Taneja, cofounder FamPay said “FamPay is creating a market segment that a lot of brands don’t focus on today. With the rapid growth, we saw our users loving the product simply because we gave them something they did not have before. FamCard is the first card a teen ever holds and they remember it as their first bicycle or phone. It’s their first step at being responsible with money, their first step into adulthood. We plan to stay with them from this first step throughout their financial journey by evolving the product as they grow.”
For issuing cards, FamPay has partnered with IDFC Bank. While users get a virtual card instantly on signing up, the physical cards can be ordered through the app.
“Sequoia India first intersected with the FamPay team during their seed round and decided to invest right away. We were struck by the passion, insights and customer centricity of Kush and Sambhav. Post launch, we were not surprised to see terrific user adoption and love. It was apparent to us they understood their users, and had very nuanced views on how to serve them best. The team is excited to double down in this round and is looking forward to working with them to help build FamPay over the next many years,” said Shailendra Singh, Managing Director, Sequoia Capital (India) Singapore.
Before launching the final product, FamPay had run an experiment in August 2019 with an Android app on the Google Play Store. The startup claims that it got over 20K installs within seven days of launch and ranked as the fifth most trending app on Google Play Store. FamPay has added social elements such as a feed where users can post updates to boost engagement.
While fintech services and products targeting children form a relatively untapped market in India, startups like Junio and Yodaa have launched their products for the segment over the past one year. In December 2020, Junio announced a $3 Mn funding round even before the launch of its financial planning product targeted at kids. The company, bootstrapped until now, says that the round would be led by marquee institutional investors, with participation from angel investors — however, it did not disclose the names of the investors.
Founded by former Paytm alumni Shankar Nath and Ankit Gera in September this year, Junio looks to digitise pocket money through its ‘digital pocket smart cards’ for children studying in grades 4 to 10.