India's FamPay gets $38m Series A
FamPay, an Indian start-up aiming to launch the country’s first digital bank for teenagers, has raised a $38 million Series A round led by Elevation Capital.
Existing investor Sequoia Capital India made a significant contribution. General Catalyst, Rocketship VC, and Greenoaks Capital came in as new investors, while Venture Highway, Y Combinator, and Global Founders Capital, which joined Sequoia India in a $4.7 million seed round last year, re-upped.
FamPay’s offering combines an app and prepaid card, which the company calls the first numberless card for teens. Users can enable the service with their parents’ consent to make payments online and offline without setting up a bank account. Card details can only be accessed through the app, which is device lock protected.
Two million users have registered for the service since its launch eight months ago, with the company describing the momentum as 100% month-on-month growth. Youth-oriented features include gamified savings and financial education functions and an in-app social media service.
“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,” Shailendra Singh, a managing director at Sequoia, said in a statement. “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.”
FamPay observes that about 40% of Indians are under 18, suggesting a massive new market every year as teens graduate to adulthood and higher levels of responsibility with money. By connecting with them young, the company hopes to build trust that can be parlayed into more advanced products later in life.
“FamPay is destined to become the destination app for Gen Z and gateway for their access to fintech and beyond,” Mridul Arora, a partner at Elevation, said. “India today has a sizable population of 250 million adolescents, and we believe that catering to this unserved audience with innovative products contextualized to their needs and behaviors will create a very valuable business.”
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