A fintech startup FamPay raises $38 million

A Bangalore-based fintech startup- FamPay, aiming to build India's first neo-bank for teenagers, raised $38 million in its Series A round led by Elevation Capital, General Catalyst, Rocketship VC, Greenoaks Capital, Sequoia Capital India, Y Combinator, Global Founders Capital and Venture Highway. According to news reports, FamPay was in talks with Elevation Capital to raise a new round earlier this month.

A fintech startup FamPay raises $38 million

The size of the funding makes it one of the largest Series A rounds in India. The funding brought FamPay’s to-date raise to $42.7 million.

The thesis behind the startup

Sambhav Jain and Kush Taneja — both of whom are graduates from Indian Institute of Technology, Roorkee — founded FamPay in 2020, which makes it fitting for teenagers to make online and offline payments through the FamPay app as well as the FamCard - India’s first numberless card for teens for secure payments.

Sambhav Jain said, “The vision behind the startup is to provide financial literacy to teenagers, who additionally have limited options to open a bank account in India at a young age. Through gamified savings experiences and an in-app exclusive community, our startup is trying to make lessons about money, fun for youngsters.”

 

Investors’ beliefs

Mridul Arora, a partner at Elevation Capital said, “We are fortunate and thrilled to partner with Sambhav, Kush and the entire FamPay team as they march ahead in their mission to re-envision banking for teenagers. We have been extremely overwhelmed by FamPay's product innovations, growth trajectory and customer love - all early signs that FamPay is destined to become the destination application for GenZ and gateway for their access to fintech and beyond."

“India today has a good-sized population of adolescents and we believe that catering to this underserved audience with innovative products contextualised to their requirements and behaviours will create a very valuable business,” Arora added.

Shailendra Singh, Managing Director of Sequoia Capital (India) Singapore, said, “It was apparent to us that FamPay understood their users and had very nuanced views on how to serve them best. We were struck by the passion, visions and customer-centricity of Kush and Sambhav. Post-launch, we were not surprised to see terrific user adoption. 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.”

 

Future plans

The startup, which has garnered over 2 million registered users, plans to install the fresh capital to expand its user base and product offerings, and hire engineers. It is also looking for people to join its leadership team, said Sambhav Jain.

He added that the existing services of FamPay are just the beginning. Eventually, the startup wishes to provide a range of services and serve as a neobank for the youth to keep them with the platform forever, he said.

In the long-term, FamPay envisages helping this demographic take the next step in their financial journey to becoming the only bank they will ever need.  FamPay invests heavily in user experience and product innovation, to make simple and convenient payments accessible for teens. The company’s goal is to empower a financially aware generation who understand the nitty-gritties of personal finance and are capable of making financial decisions assertively.