Although India has hundreds of millions of citizens, only a small fraction of them have a bank account.
For example, less than 30 million people have invested in stocks or mutual funds. Although a few startups have made it easier to invest in stocks and mutual funds, the overall number has remained static.
A startup in India believes it has the answer and is already seeing positive early traction.
Jar was founded earlier this year by Misbah Ashraf and Nishchay AG (ex-directors of mobility startup Bounce) and Nishchay AG (sold to Foxy).
The startup's six-month-old Android app allows users to begin their savings journey starting at 1 Indian rupee.
Jar users can invest in many ways and get started in seconds. To set up recurring payments, the app can be used with Paytm (PhonePe support in development). The startup is the first to utilize UPI 2.0's recurring payments support. For daily investments, they can set up amounts ranging from 1 Indian rupee up to 500.
The Jar app allows users to send text messages and can save a small amount for each monetary transaction. For example, if a user spends 31 rupees on a transaction, Jar app rounds it up to the nearest 10th figure (40 in this case). This saves nine rupees. The app can be opened manually by users to allow them to spend as much or little as they want.
The app invests the money saved in Jar into digital gold.
Because people in South Asia already trust gold, the startup uses it for investment.
India is known for its unique love affair with gold. Nearly everyone, from rural farmers to urban workers, has a stash of the yellow metal and wears jewelry at weddings.
Indian households have an estimated 25,000 tonnes of gold in their homes. This precious metal's value is approximately half of India's nominal GDP. India is one of the largest gold importers in the world because of its high demand.
Nishchay said that if you're thinking of bringing 500 million more people into institutional savings or investments, it is up to us to teach them about the benefits of other instruments on the market.
He said that we want to give them gold as the trust instrument. He said that the startup will eventually offer more investment opportunities.
They met many years ago while exploring the possibility of MarsPlay and Bouncing collaborating. They kept in touch and realized last year that neither knew anything about investing during one of their many conversations.
Misbah, who was reminiscing on his childhood, explained that this is when the dots began to connect. Bihar Sharif is a small town in Bihar. He said that my family was deeply in debt during my childhood because they had no savings and made poor financial decisions.
Both of us know what it is like to be a middle-class family. This person is not able to have any money in the past, but they still have aspirations. Nishchay said that once you begin earning money, you immediately start spending it all.
He said that the market requires products to help them get off the ground.
This idea is very similar to Acorn in the U.S. and Stashs in Europe, and is starting to gain traction. According to the founders, the app has been downloaded more than half a million times. Investors are also taking notice.
Jar announced Wednesday that it had raised $4.5 million from a group of prominent investors including Arkam Ventures and Tribe Capital. Also, angels such as Shaan Puri (founder with Twitch), Shaan Pureli (founder at Twitch), Ali Moiz, Howard Lindzon (founder at Social Leverage), Vivekananda Halekere (cofounder of Bounce), Alvin Tse, Kunal Khattar (managing Partner at AdvantEdge)
More than 400 million Indians will soon embrace digital financial services. Jar has created an app that will help them in many intuitive ways, including through gamification to start their investment journey. In a statement, Arjun Sethi, cofounder of Tribe Capital said that the team is executing at a rapid pace and growing rapidly each week.
Nishchay stated that transactions and AUM on Jar app are increasing 350% per month. He said that the startup will expand its product offering in the next few days.
