India’s FamPay, a startup that is building a digital bank aimed at teenagers, has collected $38 million in venture capital. In a blog post, Bengaluru-based FamPay said the funding round was led by Elevation Capital. The company said it will use the cash to build its team and further fuel growth.
“India today has a sizable population of 250 million adolescents, and we believe that catering to this unserved audience with innovative products … will create a very valuable business,” said Mridul Arora, partner, Elevation Capital. He said that early signs show “FamPay is destined to become the destination app for Gen Z.”
According to the company, the FamPay app has safety and support features that both teens and parents can trust. In addition to payment products, FamPay also offers a gamified savings feature as well as an in-app community “to help teens learn, earn and grow.”
The company’s FamCard offers teens “their first step at being responsible with money, their first step into adulthood,” said Kush Taneja, co-founder of FamPay. Teens can enable FamPay after their parents’ consent, and can start making payments without the need to set up a bank account. The company said FamPay already has two million registered users just eight months after its launch.
The $38 million funding round had major participation from existing investor Sequoia Capital India. Other early investors (Venture Highway, Y Combinator and Global Founders Capital) and new global investors like General Catalyst, Rocketship VC, and Greenoaks Capital also participated in the round.
For its part, Fidelity Investments is also offering a product targeting young teens ages 13 and up, with the goal of helping them get started with investing. The Fidelity Youth Account is designed to allow young users to buy and sell most U.S. stocks, exchange-traded funds (ETFs) and Fidelity mutual funds. Parents can monitor their child’s account activity and set up notification alerts for trades, transactions and spending, but the action in the account is squarely on the shoulders of its young user.