Indian fintech Jar, which closed a $32 million financing round in February this year, is in talks to raise new funding as it looks to scale its product and expand its offerings.
The Bengaluru-headquartered startup is engaging with several investors to raise about $50 million at a $350 million valuation, according to four people familiar with the matter. Asked for comment on Wednesday, Misbah Ashraf, co-founder of Jar, said it was too early to comment.
Tiger Global, an existing backer of Jar, is positioning to lead the one-year-old startup’s Series B funding, the sources said, requesting anonymity as the details are private. Folius Ventures and Paramark are also engaging to invest in the new round, the people said.
Jar, which operates an eponymous app, is helping millions of Indians begin their investment and saving journeys. The startup has amassed over 7.5 million registered users, it disclosed to investors last month.
Nearly a billion Indians have bank accounts today, but they have never made any investment. Part of the reason is confusion, explained Nishchay Ag, co-founder and chief executive of Jar, in an earlier interview with TechCrunch. “Their world is littered with ads of different financial instruments,” he told TechCrunch in an earlier 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 at the time.
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 have a fascination with gold is an understatement; they have a private stash worth $1.5 trillion of the precious metal. 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 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.