Tiger Global has led a new funding round to Jar, the Indian fintech that is helping millions of Indians save small amounts to invest in digital gold as the startup prepares to launch a slew of new offerings including insurance, mutual funds and loans.
Jar said Thursday it raised $22.6 million in its Series B funding round. The funding values the one-year startup at more than $300 million, he said, and saw the participation from Folius Ventures, Panthera Capital, Prophetic Ventures, Yes VC, WealthFront founder Adam Nash and Founders Fund director Zachary Hargreaves as well as early backers. Arkam Ventures, Rocketship.vc and WEH.
TechCrunch previously reported on the early deliberations of the round. The Bengaluru-based startup, which has raised more than $58 million so far, is committing to a few investors and could add a few more million to the round, two sources familiar with the matter told TechCrunch.
Even though Indian banks have opened a billion accounts for citizens in the South Asian market, a significant number of people are not keeping any savings. In the event of an unexpected or emergency expense, many are forced to rely on friends and family or shark lenders for the injection of capital.
Part of the reason so many Indians never save or invest is confusion, explained Nishchay AG, co-founder and managing director of Jar, in an interview. “Should they invest in mutual funds, the stock market, crypto, various banking programs? The choices are many as the world around them is littered with advertisements,” he said.
Jar removes the pressure by giving people an asset class that Indians can relate to: gold.
(To say that Indians, who have a private reserve worth $1.5 trillion worth of precious metal, are fascinated by gold would be an understatement. For generations, Indians from all socio-economic backgrounds have preferred to store their savings – or at least part of it In fact, the demand for gold in India is such – Indians store more gold than citizens of any other country – that the South Asian nation is also one of the world’s largest importers of this precious metal. )
A familiar asset class is part of the solution. Jar’s other value proposition is the ease with which it allows its users to save and invest. On its eponymous app, the startup allows users to choose from different savings options such as roundups – where the closest round number after a transaction is automatically recorded, as well as set recurring savings amounts and perform a single execution, explained Misbah Ashraf, co-founder of Jar.
Jar has rapidly gained popularity since the product was launched a year ago. Its app has more than 9 million registered users and records more than 220,000 transactions every day, he said. The startup, which is seeing average monthly growth of 20%, also spends significantly less to attract new users: less than $1.5 per user, she said.
“Beginning with digital gold, a well-understood and loved asset class in India, Jar’s savings app quickly gained the trust and appeal of young earners interested in developing a savings strategy. savings and investment,” said Alex Cook, partner at Tiger Global. , in a report. “We are impressed with the rapid growth of the business and are excited to double down as they expand into new asset classes.”
The startup, which employs around 90 people, is now preparing to expand its offer. “We’re working to build the most ubiquitous and contextual platform to help people navigate financial options without being intimidated,” Nishchay said.
Jar, who is also looking to hire 50 other people, develops and tests secured and unsecured loans, mutual funds, fixed deposits, peer-to-peer lending and insurance, he said. The startup plans to roll out these new offerings in the coming quarters, he said.
Misbah, whose inspiration for starting Jar was her family’s personal struggle with finances, believes Jar was able to help people get into the habit of financing savings. These clients, most of whom live in small towns across the country, “are now ready to explore evaluating other instrument options,” he said.
The new funding extends Jar’s track by three years, he said.
India has emerged as a key fintech hub over the past decade as numerous banks, startups and other institutions rush to tap into what many consider to be the last big growth market.
For years, traditional local banks and mutual funds have attempted to exploit the Indian masses with their products. But their non-personalized offerings and overreliance on local credit bureau books have shrunk their customer base to just 30 million people.
“Making a product is one thing, being able to sell it is another. All of these institutions are good at manufacturing. To sell, you must align with the individual’s personality, idiosyncrasies, insecurities, cognitive load, and cultural significance. It’s an art and a science in itself,” Nishchay said in a previous interview.
“Jar’s growth story would be incomplete without mention of the guardrails that were put in place preemptively to make growth a controllable outcome as opposed to an incomprehensible vector. The company has an equal measure of d thoughtful execution as well as a high level of transparency where stakeholders ranging from employees, partners and investors are fully aware of key initiatives and priorities. We believe this approach helps create a sustainable business with a trajectory of predictable growth,” Rahul Chandra, managing director of Arkam Ventures, said in a statement.