Neo-bank Jupiter recently announced receiving a Rs 641 crore funding led by investors Tiger Global and Sequoia. This is the biggest fundraise to date for a Neo-bank in India. However, this breakthrough investment has raised questions about why Tiger Global and Sequoia invest in Jupiter.
In this article, we will introduce the Neo-bank and why Tiger Global and Sequoia have chosen to invest in it.
Background of Jupiter
Jupiter is India’s newest neo-bank, a digital-only version of the traditional retail banking format. Jupiter is the brainchild of its founder and CEO, Shashwat Sharma. The company was launched in February 2020, making it one of India’s youngest digital financial services startups to be operational.
It offers personalized banking services with features like: Budgeting tools, Centralized control of accounts and transactions and Intelligent investments. For example, users can open unlimited virtual bank accounts (eg for specific projects or different liabilities) at no additional fees.
Jupiter claims to provide the best technology that “enables people to make smarter decisions about their money”. In June 2020, Jupiter reported raising Rs 641 crores in their latest Series B funding round led by Tiger Global Management LLC and Sequoia Capital India Advisors Private Limited (Sequoia). Jupiter’s Series B round included new investors such as Goodwater Capital (a US-based venture fund) and existing investors Lightspeed Ventures Partners, Matrix Partners India and Ribbit Capital. It was a record breaking fundraising in the Indian fintech landscape!
This fresh capital enabled Jupiter to scale up its operations nationwide and make significant investments in customer onboarding through machine learning, availability of personalized advice for customers about financial management etc.
Overall Jupiter’s goal is to offer complete financial freedom to users that helps them maximize use of their own money down the line on other essential aspects of life.
Neo-Bank Jupiter Gets Rs 641 Crore Funding Led By Tiger Global, Sequoia
Neo-bank Jupiter, founded by former Paytm executives, has received an investment of Rs 641 crores led by Tiger Global and Sequoia. This investment marks the second largest capital infusion into an Indian fintech startup.
It is clear that Tiger Global and Sequoia see great potential in Jupiter, but why? Let us take a look at the reasons why Tiger Global and Sequoia are investing in the neo-bank.
Digital Banking Revolution
The digital banking revolution is in full swing and venture capital companies are looking for ways to capitalize on this rapidly growing industry. Neo-banks like Jupiter are attractive for those looking to get in early. Jupiter, a Bangalore-based banking platform, has recently secured Rs 641 crore in funding led by investors Tiger Global Management and Sequoia India. This shows that these major players see a lot of potential in the company’s services.
The trend towards digital banking has been gaining steam as people worldwide become more comfortable with completing their transactions entirely online or through their mobile devices. It provides solutions for customers that can no longer trust mainstream banks to meet their needs – offering modern customer service options alongside quality products tailored to their financial needs.
By investing in Jupiter, Tiger Global and Sequoia are participating in this digital banking revolution by providing a secure platform on which individuals and SMEs can transact quickly and safely. This gives customers an alternative to traditional banks while still having access to the same important features they need – loan services, setting up recurring payments etc.
It remains to be seen whether or not Neo-Banking solutions will become completely pervasive across all parts of society; however it is clear that with investments like those made by Tiger and Sequoia, Neo Banking will remain competitive within the financial sector in the future.
Growing Demand for Digital Banking Services
The rapid growth of digital banking services has become an attractive draw for investors. The current investment round in India-based neo-bank Jupiter backed by Tiger Global and Sequoia Capital marks a new milestone in this trend. With more people turning to online banking and other digital financial services, companies such as Jupiter offer many advantages that traditional banks cannot.
Jupiter offers its customers access to various modern services including interest-bearing accounts, credit cards, loans, investments, insurance, etc. This has helped it to attract large amounts of venture capital funding from companies such as Tiger Global and Sequoia. In addition, the focus on providing these timely digital offerings resonates with consumers’ changing expectations from their banking partner.
Other features that make Jupiter attractive include:
- Its straightforward application process.
- Ability to apply for loans without having to provide physical documents.
- Low deposit fees.
- Easy payment processes using UPI or IMPS transfers.
These types of convenient features are becoming increasingly sought by customers in today’s marketplace. This is why investors are keen on investing in neo-banks like Jupiter – they see potential for significant growth as consumers embrace the future of digital banking technology.
Expansion of the Digital Banking Industry
The digital banking industry is expanding rapidly as more and more retail customers shift from traditional banking. This shift is propelled by the convenience and flexibility of digital banking, as it offers peer-to-peer transfers, direct deposits, and other services faster than the traditional banking system.
According to market research firm Gartner Inc, the global digital banking market revenue reached USD 33.84 billion in 2019 and is projected to reach USD 59.50 billion by 2024 at a compound annual growth rate (CAGR) of 11.8%. The popularity of digital banking services is one of the primary drivers of this segment’s growth in recent years.
Thanks to its huge population and willingness to adopt new technologies like FinTechs (Financial Technologies), India has been a major growth driver in this segment. India currently ranks second in overall fintech adoption worldwide with 14 major fintech investors investing over $2 billion into Indian startups alone since 2018, according to PwC Fintech Report 2021.
Neo-banks are one of the new additions to India’s expanding financial technology industry, backed by large investments from some of the biggest venture capital firms like Tiger Global Management and Sequoia Capital India. These investments will fuel further development for neo banks like Jupiter, helping them accelerate their growth plans and scale more quickly than ever before.
Impact of Investment
The recent investment of Rs 641 Crore by Tiger Global and Sequoia in Neo-Bank Jupiter has had a massive impact on the FinTech industry. This investment has made it clear that venture capital firms are willing to invest their money in new and innovative technologies.
We will discuss the various ways this investment has impacted the industry, and what this might mean for the future of financial technology.
Increase in Customer Base
One of the main benefits that neo banking start-ups such as Jupiter receive from their latest funding rounds is increased customer base. With investment capital like that of Tiger Global and Sequoia, start-ups can continue to grow and offer services to more customers. Additionally, companies such as these can gain access to new markets, technologies, and connections.
In Jupiter’s case specifically, they recently announced the launch of their peer-to-peer platform ‘Jupiter P2P’ which allows users to do fund transfers between themselves without the need for any traditional bank account.
This new technology gives users more freedom and convenience in transferring funds from their accounts without waiting for lengthy approvals or fees associated with traditional banking systems. Further, this technology aids in expanding its services and customer base across different countries and regions due to its faster transaction speed.
Moreover, an increase in customer base has positively affected Jupiter’s brand image, which helps it access new markets easier than before and secure additional funding during future rounds of funding sessions.
Improved Financial Performance
Investment from Tiger Global and Sequoia will boost the fiscal performance of neo-banking platform Jupiter, which has already established itself in India’s digital banking space. With this new investment, Jupiter can catapult itself to the next level by introducing innovative financial products and services that can benefit customers.
The additional funding is an opportunity for Jupiter to expand its offerings and tap into deeper pockets of customers. It can also provide access to larger credit lines, allowing customers to gain better terms on their loan requirements. The new cash infusion will also help expand its operations into other Southeast Asian markets, promoting financial inclusion in these countries.
Moreover, with Tiger Global and Sequoia’s expertise in structuring transactions such as mergers and acquisitions (M&A), they can provide strategic advice on organic growth opportunities for Jupiter. With expert guidance available, new partnerships may also be explored along with better monetization opportunities for the platform’s service offerings. This would help produce more revenue for the neo-bank which may otherwise remain untapped without a large funding round like this one from Tiger Global and Sequoia Capital India.
Conclusion
Jupiter has solidified its position as one of the most promising neo-banks in India. With the combined investment from Tiger Global and Sequoia into the startup, Jupiter is now well-poised to take full advantage of India’s growing digital banking services market.
Let us now draw some conclusions from the investment.
Summary of the Investment
Tiger Global and Sequoia India have declared their investment in the neo-banking platform, Jupiter. This Rs 641 crore financing, led by Tiger Global Management and Sequoia India, values Jupiter at over $660 million and will support the company’s growth plans across India. Existing investors RTP Global, Hummingbird Ventures, Telescope VC, @Ventures, Kunal Shah’s CRESCO CAPITAL also participated with additional capital across multiple tranches.
Jupiter has seen tremendous success since its inception in 2019. According to reports, it acquired depositors quickly and has achieved a run rate of $1 billion (Rs 7500 crore) deposits since launch at around 1 million active users. This new funding will fuel Jupiter’s accelerated growth plans within a year of launching its banking operations in multiple markets across India.
The investment by Tiger Global and Sequoia highlights the enormous potential of neo-banking in both regional & national settings. It’s not just investors betting on the digital banking segment but tech giants like Google & Amazon chasing numerous opportunities within this domain as well. This is an extremely important step towards reinventing banking services for customers from lower economic backgrounds and plugging access gaps to mainstream banking products for people outside urban cities in tier 2/ tier 3 markets throughout India.
