[Funding Alert] Sequoia, YC Back Payments App For Youth In $4.7 Mln Round
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FamPay, a payments app aimed at teenagers, has raised $4.7 million in funding from Sequoia India, Y-Combinator, Venture Highway and Global Founders Capital. Others who also participated in the round were Kunal Shah, Pine Labs chief Amrish Rau, Kevin Lin, co-founder of Twitch, and Robinhood co-founder Vladimir Tenev.
Founded by recent IIT Roorkee graduates Kush Taneja and Sambhav Jain, the start-up helps youngsters with their first accounts and a spending card.
FamPay said it will use the funds to build a quality engineering team to develop its technology and grow faster.
During their time at IIT, the two founders saw a gap that existed for the youth as educational and financial institutions don’t quite focus on ensuring that the younger age group knows about the fundamentals of personal finance.
“Most of the products built in India are focused on adults and there’s nothing out there for teenagers between the age 12-18 years. While digital payments are growing exponentially, the teens’ are unable to pay directly for the services and experiences that they value,” Taneja said in a statement.
For a generation that is perhaps the most tech-savvy, the lack of bank accounts, access to digital payments and complete dependency cash payments was the problem that Taneja and Jain wanted to solve.
FamPay gives teenagers their first card without the need to set up a bank account and they can use it for all online and in-store purchases. The cardholders can also use the mobile application, which has UPI-integration, to send and receive payments. For parents and guardians, instead of managing individual expenses, they can just top up the FamPay account, while also having enough supervision on the subsequent spend.
“GenZ expects a combination of something cool, trustworthy and social, and that’s the sweet spot we are working day and night to cater to,” added Taneja.
In August last year, FamPay attracted more than 20,000 users in seven days during what was an experiment to test the market opportunity for such an application. Gamification and social elements that encouraged sharing resulted in such rapid growth, claims FamPay.
Taking cue from the same behavior, the FamPay app has a feed where users can share updates on what they are spending, from food to fashion.
“As this is the habit-building age, there’s a huge scope for innovation and redefining how payments are done. We aim to grow as our users grow, developing new products for an expanding user base,” said Jain.
The company said it is going to bring the app out of stealth mode soon. While the app will be available on both the Google Play Store and the Apple App Store, the cards will be issued in partnership with IDFC First Bank. Users can avail the virtual card instantly on signing up, and the physical cards can be ordered thereafter.
“Parents play an important role in shaping their children’s financial behaviour and there’s no better way than providing them with financial prudence at a young age,” said Neeraj Arora, founding LP and advisor at Venture Highway.