FamPay, a neobank or payment app for teenagers, has raised $38 million Series A, led by Elevation Capital, General Catalyst, Rocketship VC and Greenoaks Capital. Existing investors Sequoia Capital India, Y Combinator, Global Founders Capital and Venture Highway also participated in the round.

In the increasingly competitive world, it’s not only the adults who are looking to increase their wealth but even teenagers who are joining the race.

“FamPay is creating a market segment that a lot of brands don't focus on today. With the rapid growth, we saw our users loved 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,” said Kush Taneja, co-founder FamPay.

Several high-profile investors are bullish on this segment as well and are backing this fintech startup.

“We are privileged and delighted to partner with Sambhav, Kush and the entire FamPay team as they march ahead in their mission to reimagine banking for teenagers. We have been extremely impressed by FamPay’s product innovations, growth trajectory and customer love - all early signs that FamPay is destined to become the destination app for GenZ and gateway for their access to fintech and beyond. India today has a sizable population of 250M adolescents and we believe that catering to this unserved audience with innovative products contextualised to their needs and behaviours will create a very valuable business”, said Mridul Arora, Partner, Elevation Capital.

As per UNICEF data, India has the largest adolescent population in the world at 253 million and the upcoming neobanks are coming up with offers that can be tailored to this tech-savvy populace.

“With around 40 percent of the Indian population being below 18, every year millions of new teenagers will start using their first smartphone and FamPay envisions becoming their go-to brand,” said Sambhav Jain, co-founder, FamPay. By connecting with them young, we are building an early relationship with the future adults most brands eventually want to tap, making FamPay the gateway for brands to target GenZ, he added.

In March 2020, the company announced raising $4.7 million in seed funding from Y Combinator, Venture Highway, Sequoia Capital India, and Global Founders Capital, as well as several angel investors like Twitch co-founder Kevin Lin, Robinhood co-founder Vladimir Tenev, CRED founder Kunal Shah and Pine Labs CEO Amrish Rau.

The company at present is valued at $42.7 million.

“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.

Unlike the United States and other countries where it’s common for teenagers to get jobs at a young age, a similar tradition doesn’t exist in India. Fampay said their goal is to enable a financially aware generation who understand the fundamentals of personal finance and are capable of making financial decisions.

After taking consent from parents, the firm provides teenagers with an app to make online and offline purchases through Fampay App as well as the FamCard. All the card details can only be accessed through the FamPay App and are device lock protected, which makes it easy for parents to keep track of high-ticket spendings, the company added.

Within just 8 months of its inception, the startup claims to have amassed over 2 million registered users. Fampay plans to use the fresh capital to expand its user base and product offerings. The company is envisioning to become the only bank the adolescents will ever need.

(Edited by : pradeep suresh v)

First Published:Jun 16, 2021 3:13 PM IST