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India: FamPay a Neobank for teens bags $38 million

Total investments in FamPay rise to $42.7 million after closing a $38 million Series A round led by Elevation Capital.

Bangalore-based FamPay has closed a $38 million Series A round led by Elevation Capital. Other participants in the round include General Catalyst, Rocketship VC, Greenoaks Capital and existing investors Sequoia Capital India, Y Combinator, Global Founders Capital and Venture.

The latest round takes the total money invested in the startup to $42.7 million, and it is one of the largest Series A rounds in India.

FamPay seems to be the only startup targeting this age bracket, unlike the US, where several startups, including Greenlight, Step and Till Financial, are chasing to serve the teenagers.

To quote Mridul Arora, a partner at Elevation Capital.

"In India, there currently is no startup looking to solve the financial access problem for teenagers. If you're able to serve them at a young age, over the course of time, you stand to become their go-to product for a lot of things," Arora said. "FamPay is serving a population that is very attractive and at the same time underserved."

Founded by Sambhav Jain and Kush Taneja, FamPay enables teenagers to make online and offline payments. FamPay's model is built on the provision of financial literacy to teenagers, who additionally have limited access to a bank account in India owing to their young age. One way FamPay Hopes achieve this is through gamification. The startup said that it is making lessons about money fun for youngsters through gamification.

Currently, FamPay has over 2 million registered users and plans to utilize the fund for hiring engineers and scaling up its customer base and product offerings. Jain, one of the co-founder, acknowledged that the startup is also looking for people to join its leadership team.

India in focus

GDP: $2.869 trillion compared to Malaysia's $364.681 billion in 2019

Population: 1.366 billion compared to Malaysia's 31,949,777 in 2019

GDP per Capita: $2,099 compared to  Malaysia's $11,414  in 2019