FamPay, a fintech startup focussed on teenagers, on Wednesday said it has raised $38 million (about ₹278.4 crore) in funding, led by Elevation Capital and existing investor Sequoia Capital India.

Other early investors, Venture Highway, Y Combinator, Global Founders Capital and new Global Investors like General Catalyst, Rocketship VC, and Greenoaks Capital also participated in the Series A round, a statement said.

FamPay will use the latest round of funding to build a leadership team to further fuel growth, it added.

FamPay makes it convenient for teenagers to make online and offline payments through FamPay app as well as FamCard. In addition to payment products, FamPay also offers gamified savings experiences.

“FamPay is creating a market segment that a lot of brands don't focus on today. It’s their (teenage users) first step at being responsible with money, their first step into adulthood. We plan to stay with them from this first step throughout their financial journey by evolving the product as they grow,” Kush Taneja, co-founder of FamPay, said.

FamPay’s growth

The company has crossed 2 million registered users within 8 months of its launch and has been averaging 100 per cent month-on-month growth.

In March 2020, the company announced raising $4.7 million in seed funding from Y Combinator, Venture Highway, Sequoia Capital India, and Global Founders Capital, as well as angel investors, Twitch co-founder Kevin Lin, Robinhood co-founder Vladimir Tenev, CRED founder Kunal Shah and Pine Labs CEO Amrish Rau.

Launched in 2020 by Kush Taneja and Sambhav Jain, FamPay is a marketing and distribution partner of IDFC FIRST Bank Prepaid Card.

“With around 40 per cent of the Indian population being below 18, every year millions of new teenagers will start using their first smartphone and FamPay envisions becoming their go-to brand,” Sambhav Jain, co-founder of FamPay, said.

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“We are privileged and delighted to partner with Sambhav, Kush and the entire FamPay team as they march ahead in their mission to reimagine banking for teenagers. We have been extremely impressed by FamPay's product innovations, growth trajectory and customer love —all early signs that FamPay is destined to become the destination app for GenZ and gateway for their access to fintech and beyond,” said Mridul Arora, Partner, Elevation Capital.

India today has a sizable population of adolescents and we believe that catering to this unserved audience with innovative products contextualised to their needs and behaviours will create a very valuable business, Arora added.

“It was apparent to us they (FamPay) understood their users and had very nuanced views on how to serve them best. The team is excited to double-down in this round and is looking forward to working with them to help build FamPay over the next many years,” Shailendra Singh, Managing Director of Sequoia Capital (India) Singapore, said.