Robinhood, CRED-backed teen focused neobank FamPay cashes in $38m from Elevation, Sequoia Capital

Teen-focused fintech startup FamPay raised $38m in a Series A funding round, led by Elevation Capital and major participation from existing investor Sequoia Capital India.

Other investors such as Y Combinator, Venture Highway, Global Founders Capital, as well as new investors including General Catalyst, Rocketship VC, and Greenoaks Capital also participated in the round.

The Bengaluru-based firm will use funds from the latest round to build its leadership team and fuel further growth, which includes capturing more users via marketing efforts and launching new features on the platform.

Some new features and products include financial literacy games that can help teens familiarise themselves with financial terms, new FamCards and an in-app commerce feature that will enable consumer brands looking to target the teenage segment to sell directly on the FamPay app.

FamPay’s goal is to create a generation of financially aware and savvy individuals who understand the fundamentals of personal finance and can take important financial decisions independently. FamPay’s app and its numberless card help teens carry out transactions online, as well as offline, with consent from their parents. The app does not require a separate bank account to be opened.

The startup has over two million users on its platform currently, averaging 100% month-on-month growth. Brands the startup has explored affiliate marketing partnerships with include EdTech startups Unacademy and Front Row, and Man Matters, a health and wellness company for men, among others

Excluding the latest round, the startup, founded in 2019 by two IIT Roorkee graduates, has raised $4.9m in funding so far, from investors including Sequoia, Venture Highway, Soma Capital, and Y Combinator.

FamPay’s seed round also saw participation from prominent angel investors such as Twitch co-founder Kevin Lin, Robinhood co-founder Vladimir Tenev, CRED founder Kunal Shah and Pine Labs CEO Amrish Rau.

Commenting on the round, FamPay co-founder Kush Taneja 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.”

Echoing a similar sentiment, co-founder Sambhav Jain added, “With around 40% 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. 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.

“It’s the most tech-savvy generation as they haven’t seen a world without the internet. They adapt to technology faster than any other target audience and their first exposure with the internet comes from the likes of Instagram and Netflix. This leads to higher expectations from the products that they prefer to use. We are unique in approaching banking from a whole new lens with our recipe of community and gamification to match the GenZ vibe.”

In other markets, including the US, a number of startups including Greenlight, Step and Till Financial are chasing to serve the teenagers, but in India, there currently are very few startups looking to solve the financial access problem for teenagers. Some others include startups like Junio and Yodaa which launched their products in the space over the past year.

Copyright © 2021 FinTech Global

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