A seven-month-old fintech app that is helping millions of Indians to begin their investment and saving journeys has attracted the attention of Tiger Global.
The New York-headquartered investor led the new round, with participation from scores of investors, including Rocketship.vc, Stonks, Force Ventures, Arkam Ventures, Klarna founder Victor Jacobsson, Suleman Ali of Ali Capital, Shamir Karkal of Sila Money, Byron Ling of Cannan Partners and Joel John of Ledger Prime.
The new round values Jar at over $200 million, according to two people familiar with the matter. Jar co-founders declined to comment on the valuation.
Nearly a billion Indians have bank accounts today, but they have never made any investment. Part of the reason is confusion, said Nishchay Ag, co-founder and chief executive of Jar. “Their world is littered with ads of different financial instruments,” he told TechCrunch in an interview.
For decades, banks and mutual funds have been trying to tap India masses with their products. Despite the hundreds of millions of dollars they have sunk in to win the market, they have been able to court fewer than 30 million individuals.
“Manufacturing a product is one thing and being able to sell it is another. All these institutions are good at manufacturing. For selling, you have to be aligned with the individual’s persona, idiosyncrasies, insecurities, cognitive load and the cultural significance. That’s an art and science by itself,” he said.
Jar is tackling this by choosing a financial instrument that is familiar to most Indians: gold. For over a century, Indians have been stashing gold in their houses, treating the yellow metal as both good investment and status symbol, he said.
To say Indians, who have a private stash worth $1.5 trillion of the precious metal, would be an understatement. For generations, Indians across the socio-economic spectrum have preferred to stash their savings — or at least a part of it — in the form of gold. In fact, such is the demand for gold in India — Indians stockpile more gold than citizens in any other country — that the South Asian nation is also one of the world’s largest importers of this precious metal.
Jar, which raised $4.5 million from a range of investors including Tribe Capital and Arkam Ventures last year, operates an eponymous app that makes it very simple for users to start investing.
The app fetches a tiny amount each time a user makes a transaction. It rounds up an individual’s daily spendings and puts some money aside as investment. Users’ investments in digital gold is backed by physical gold of the same amount and they can choose to withdraw that much gold or liquidate their investments at any time, said Misbah Ashraf, co-founder and chief product officer of Jar, in an interview.
The bet is working. The app has amassed over 4 million users, 99% of whom are investing in any asset class for the first time, said Nishchay.
The duo first connected several years ago when MarsPlay — Misbah’s previous venture (which has been acquired since) — and Bounce — where Nishchay served as head of engineering, supply and business — attempted to explore synergies for the startups. They stayed in touch and in late 2020 during one of their many conversations realized that neither of them knew much about investments.
This was a triggering point for Misbah, who had seen his family struggle through debts, he said. “We were both tech savvy, running businesses and yet we too hadn’t thought much about savings and investments,” he said. “We started to wonder if we were alone or whether it was a systemic issue with everyone. It’s pretty much the latter,” he said.
Jar is attempting to build a financial habit among individuals to start their investment journeys. Now that it’s made inroads among consumers in every Indian state, said Nishchay, the startup is looking to offer many more financial instruments where its users can invest, he said.
“A habit and discipline is clearly being formed and we are seeing a jump of 20% in investments month over month among our users,” he said.
The startup is also looking to lend to its users and offer them insurance in the next few months, he said.
“Jar is bringing new users into the online investing space, starting with digital gold as the first product,” said Alex Cook, partner at Tiger Global, in a statement. “We are bought into Jar’s mission of helping users build a daily savings habit, and we’re excited to partner with the team as they scale to millions of customers.”