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FamPay, a fintech aimed at teens in India, raises $38 million

How big is the market in India for a neobank aimed at teenagers? Scores of high-profile investors are backing a startup to find out.

Bangalore-based FamPay said on Wednesday it has raised $38 million in its Series A round led by Elevation Capital. General Catalyst, Rocketship VC, Greenoaks Capital and existing investors Sequoia Capital India, Y Combinator, Global Founders Capital and Venture Highway also participated in the new round, which brings FamPay’s to-date raise to $42.7 million.

TechCrunch reported early this month that FamPay was in talks with Elevation Capital to raise a new round.

Founded by Sambhav Jain and Kush Taneja (pictured above) — both of whom graduated from Indian Institute of Technology, Roorkee in 2019 — FamPay enables teenagers to make online and offline payments.

The thesis behind the startup, said Jain in an interview with TechCrunch, is to provide financial literacy to teenagers, who additionally have limited options to open a bank account in India at a young age. Through gamification, the startup said it’s making lessons about money fun for youngsters.

Unlike in the U.S., where it’s common for teenagers to get jobs at restaurants and other places and understand how to handle money at a young age, a similar tradition doesn’t exist in India.

After gathering the consent from parents, FamPay provides teenagers with an app to make online purchases, as well as plastic cards — the only numberless card of its kind in the country — for offline transactions. Parents credit money to their children’s FamPay accounts and get to keep track of high-ticket spendings.

In other markets, including the U.S., a number of startups including Greenlight, Step and Till Financial are chasing to serve the teenagers, but in India, there currently is no startup looking to solve the financial access problem for teenagers, said Mridul Arora, a partner at Elevation Capital, in an interview with TechCrunch.

It could prove to be a good issue to solve — India has the largest adolescent population in the world.

“If you’re able to serve them at a young age, over a course of time, you stand to become their go-to product for a lot of things,” Arora said. “FamPay is serving a population that is very attractive and at the same time underserved.”

The current offerings of FamPay are just the beginning, said Jain. Eventually the startup wishes to provide a range of services and serve as a neobank for youngsters to retain them with the platform forever, he said, though he didn’t wish to share currently what those services might be.

Image Credits: FamPay

Teens represent the “most tech-savvy generation, as they haven’t seen a world without the internet,” he said. “They adapt to technology faster than any other target audience and their first exposure with the internet comes from the likes of Instagram and Netflix. This leads to higher expectations from the products that they prefer to use. We are unique in approaching banking from a whole new lens with our recipe of community and gamification to match the Gen Z vibe.”

“I don’t look at FamPay just as a payments service. If the team is able to execute this, FamPay can become a very powerful gateway product to teenagers in India and their financial life. It can become a neobank, and it also has the opportunity to do something around social, community and commerce,” said Arora.

During their college life, Jain and Taneja collaborated and built an app and worked at a number of startups, including social network ShareChat, logistics firm Rivigo and video streaming service Hotstar. Jain said their work with startups in the early days paved the idea to explore a future in this ecosystem.

Prior to arriving at FamPay, Jain said the duo had thought about several more ideas for a startup. The early days of FamPay were uniquely challenging to the founders, who had to convince their parents about their decision to do a startup rather than joining firms or startups as had most of their peers from college. Until being selected by Y Combinator, Jain said he didn’t even fully understand a cap table and dilutions.

He credited entrepreneurs such as Kunal Shah (founder of CRED) and Amrish Rau (CEO of Pine Labs) for being generous with their time and guidance. They also wrote some of the earliest checks to the startup.

The startup, which has amassed over 2 million registered users, plans to deploy the fresh capital to expand its user base and product offerings, and hire engineers. It is also looking for people to join its leadership team, said Jain.

Solar concentration startup Heliogen basks in $108M of new funding

Sunlight is a great source of energy, but it rarely gets hot enough to fry an egg, let alone melt steel. Heliogen aims to change that with its high-tech concentrated solar technique, and has raised more than a hundred million dollars to test its 1,000-degree solar furnace to a few game mines and refineries.

We covered Heliogen when it first made its debut in 2019, and the details in that article still get at the core of the company’s tech. Computer vision techniques are used to carefully control a large set of mirrors, which reflect and concentrate the sun’s light to the extent that it can reach in excess of 1,000 degrees Fahrenheit, almost twice what previous solar concentrators could do. “It’s like a death ray,” founder Bill Gross explained then.

That lets the system replace fossil fuels and other legacy systems in many applications where such temperatures are required, for example mining and smelting operations. By using a Heliogen concentrator, they could run on sunlight during much of the day and only rely on other sources at night, potentially halving their fuel expenditure and consequently both saving money and stepping toward a greener future.

Both goals hint at why utilities and a major mining and steel-making company are now investors. Heliogen raised a $25M A-2, led by Prime Movers Lab, but soon also pulled together a much larger “bridge extension round” in their terminology of $83M that brought in the miner ArcelorMittal, Edison International, Ocgrow Ventures, A.T. Gekko, and more.

The money will be used both to continue development of the “Sunlight Refinery,” as Heliogen calls it, and deploy some actual on-site installations that would work in real production workflows at scale. “We are constantly making design and cost improvements to increase efficiency and decrease costs,” a representative of the company told me.

One of those pilot sites will be in Boron, CA, where Rio Tinto operates a borates mine and will include Heliogen’s tech as part of its usual on-site processes, according to an MOU signed in March. Another MOU with ArcelorMittal will “evaluate the potential of Heliogen’s products in several of ArcelorMittal’s steel plants.” Facilities are planned in the U.S., MENA, and Asia Pacific areas.

Beyond mining and smelting, the technique could be used to generate hydrogen in a zero-carbon way. That would be a big step towards building a working hydrogen infrastructure for next-generation fuel supply, since current methods make it difficult to do without relying on fossil fuels in the first place. And no doubt there are other industrial processes that could benefit from a free and zero-carbon source of high heat.

“We’re being granted the resources to do more projects that address the most carbon-intensive human activities and work toward our goals of lowering the price and emissions of energy for everyone on the planet,” Gross said in a release announcing the round(s). “We thank all of our investors for enabling us to pursue our mission and offer the world technology that will allow it to achieve a post-carbon economy.”

Meet Nickson, the furniture-as-a-service startup that Barack Obama’s ex-financial adviser just backed

Ever toured an apartment and fall in love with the model unit?

You’re not alone. Harvard Business School grad Cameron Johnson is a former institutional real estate investor and Greystar exec turned startup founder that realized that very often, “renters would try to rent the model apartment.”

This got him thinking. People would love to rent a model apartment in a building, and no one likes to move. This spelled opportunity in Johnson’s mind.

So in 2017, he came up with the idea of Nickson, a Dallas-based startup that fully furnishes apartments on demand.

Image Credits: CEO and founder Cameron Johnson / Nickson

“I thought ‘What if you gave people the ability to simply rent the model, or the ability to add everything in their space needs with a few clicks, similar to how a cable modem comes to your house ’ ” CEO Johnson said. “I wondered, ‘Why can’t we do that for everything else?’ ”

But Nickson doesn’t just provide furniture such as beds and sofas, it delivers all the essentials too — from extension cords to pots and pans to silverware to curtain rods. By partnering with a variety of retailers, the startup claims that it allows users “to make their new spaces move-in ready in as little as 3 hours.” 

Users take a style quiz and share apartment layout details. Nickson’s designers create an initial layout based on the dimensions of an apartment, desired functions (such as work from home) and the volume of furnishings based on a person’s lifestyle. Once the layout is complete, Nickson creates a custom design, including all furnishings and home goods. 

Upon signing up, users pay a one-time installation fee for the furniture-as-a-service offering, and then a monthly subscription charge for the duration of a lease — starting at $199 a month for a studio to $500 a month for a 3 bedroom apartment. The startup also offers concierge services such as a household supply starter kit and maid service, as an add-on to its flat monthly subscription.

Nickson is currently only live in the Dallas market, but plans to expand into other cities over the next 12 months, including expanding its beta tests in Austin and Houston. And it’s just raised a $12 million Series A to help it advance on that goal. 

A fund managed by Pendulum Opportunities LLC, a wholly owned subsidiary of Pendulum Holdings LLC, led the Series A round, which also included participation from Motley Fool Ventures, Revolution’s Rise of the Rest and Backstage Capital. 

The COVID-19 pandemic has disrupted the global supply chain, leading to delivery delays for consumers. Nickson has purchased items over time that it stores as local inventory, making it even more attractive to renters who don’t want to deal with delays and hunting down furniture and essentials, Johnson said. The convenience Nickson offers led to its user base growing 700% in 2020 compared to the year prior, he added.

Robbie Robinson, co-founder and CEO of Pendulum, said his firm was drawn to invest in Nickson due to a combination of Johnson’s “vision, secular shifts toward renting and subscription consumption and the company’s disruptive business model.” (Robinson is President Barack Obama’s former financial adviser, and recently founded Pendulum to invest $250 million in founding startups of color).

Kabir Ahmed, vice president at Pendulum, added that he believes Nickson’s model is superior to the concept of renting one-off furniture pieces in that it offers an “end-to-end, turnkey solution.”

This seamless experience is highly differentiated and offers a compelling value proposition for the consumer,” he said.

Of course, Nickson is not the only company attempting to turn the stodgy furniture rental industry on its head. Other startups offering similar services as Nickson include Oliver Space, Fernish and The Landing.

But Nickson claims that it stands out from the competition in that it “takes care of everything” beyond furniture (including artwork and toilet wand brushes) and that it can curate space and bring it all in before a renter even shows up.

“No other competitor in this space offers this level of service, detail or turnaround,” Johnson says. “You can literally arrive at your new home with a suitcase and toothbrush, and it’s ready to ‘live in.’”