#InTheSpotlight: FamPay – a fintech platform for Indian teens
The startup raised $38 million in their Series A round on June 16.
When Kush Taneja and Sambhav Jain applied to Y Combinator, they did not even have a working product – only the beta version. About a year after that demo, their startup FamPay raised $38 million in one of India’s largest Series A rounds on June 16.
Here is their incredible journey.
During their final year at the Indian Institute of Technology, Roorkee, as their batchmates huddled together in the college library to prepare for coding tests and placement interviews, Taneja and Jain had long discussions about startups.
They observed that most students around them were chasing skills and roles merely due to the packages they were bound to attract – paying no heed to whether the job was a long-term fit. “They weren’t even opening the company websites. Just looking at the money,” Jain said on the Founders Unfiltered podcast hosted by Aviral Bhatnagar and Mazin. “This made us realise that money was becoming the bottleneck to making the right decision.”
India as a country, the duo said, is notorious for not discussing money. Adolescents and teenagers, especially, lack the opportunity to gain financial literacy – a skill their counterparts in the West acquire while working odd jobs. “They start earning and investing at a young age,” Jain added.
To solve for this, Taneja and Jain set out to build a neobank for Indian teenagers and launched FamPay in 2020, offering prepaid card payments for teenagers. The platform allows minors to make payments – online, through an app, and offline, with a numberless card – without setting up a bank account with a yearly limit of Rs 2 lakh. “We wanted to gamify the experience of financial literacy so they [teenagers] learn to save, invest and budget,” Jain told Bhatnagar. “In the long term, the focus is on financial literacy about tax, credit score, and investing.”
According to a Business Insider report, the fintech startup – which is a marketing and distribution partner of IDFC FIRST Bank Prepaid Card – raised $4.7 million in seed funding last March.
Last week, the company raised $38 million in their Series A round led by Elevation Capital. General Catalyst, Rocketship VC, Greenoaks Capital and existing investors Sequoia Capital India, Global Founders Capital, Y Combinator as well as Venture Highway were also a part of the new round, according to a TechCrunch report.
To get their initial users, the 23-year-old duo targeted student leaders – head boys and head girls in different schools as well as those in the performing arts – to become “brand ambassadors” or “influencers.” This helped them get the first 300-400 customers. Once they began using the platform and posting about it on social media, FamPay caught fire and began acquiring users rapidly. The company has now surpassed 2 million registered users.
While announcing their funding round on Twitter last week, co-founder Taneja also shared some learnings from the “smartest and youngest customers in fintech.”
“We are getting younger kids on our platform every day,” he wrote. “The age at which teens get their first phone is decreasing every year and COVID has only accelerated that. Every year millions of teens will get their first smartphones & we want FamPay to be their go-to brand.”
With the latest funds, the founders plan to fuel this growth further, launch new products, and invest in building their team.