When Shankar Nath and Ankit Gera were brainstorming startup ideas last year, the alums of digital payment major Paytm knew they wanted to do something in the fintech space.
It was difficult to come up with a compelling pitch in an already competitive and crowded market, but then they shifted their thoughts away from the target segment most fintech companies cater to—adults. Excited about the idea of building a fintech platform for kids, Nath and Gera decided to jump right in. There are only a handful of companies that are building fintech services for minors, but they believed the market was still up for grabs.
Launched early this year, New Delhi-based Junio operates an app specifically designed for children between the ages of 12 and 17. Besides storing pocket money online, the app also gives its users a bank-issued card.
Junio’s app isn’t just a wallet. It has the option for parents to hand out task-based rewards, which give their teenage children a reason to complete their chores on time. Junio has other features that help kids cultivate habits of saving as well as teach them about interest-bearing provisions.
Kids in India received an average allowance of INR 555 per month in 2017, a study by cartoon channel Pogo said, but the process involves more than banknotes.
“During our discussion with our target users [children], we learned that teenagers who received cash as pocket money had to borrow their parents’ debit or credit cards for online purchases,” Gera, co-founder of Junio, told KrASIA.
Junio collaborated with RBL Bank to give minors their own cards to spend with. This partnership allows the company to issue a card, which syncs up with RBL Bank’s e-wallet.
The company charges a one-time fee of INR 99, or a little over one dollar, for the card. Nath said parents who use the Junio app develop the habit and preference of transferring monthly allowances to the digital wallet instead of handing out cash. In addition, it helps them keep tabs on their children’s spending habits.
While parents often lend children their cards, they worry about the cards getting lost, or their children falling prey to scams, Nath said. With a limit of INR 10,000 (USD 134) and daily or weekly caps, Junio’s card gives parents some peace of mind.
At the moment, the company has around 150,000 users, including both parents and children. “We are set to grow aggressively in the coming months,” Nath said.
Junio has raised USD 2 million from investors such as Kunal Shah, founder of Cred; Ashneer Grover, CEO of payment company BharatPe; and PolicyBazaar co-founder Yashish Dahiya.
To compete with existing players in the sector, Junio will soon allow cash withdrawals from ATMs through its card, and the company will partner with online and physical retail outlets that sell food, apparel, and electronics for exclusive discounts and cash-back offers. Other startups active in this space include FamPay, BirdFin, and Walrus. Investors are also bullish on this segment. VC firms like Sequoia Capital, Y Combinator, and Better Capital have cut checks for financial services companies aimed at kids.
Nath said the market is huge, as well as untapped, so it doesn’t matter if there are similar products. Once the company hits 100,000 users, it will introduce new revenue models. “We will roll out new products for parents who are looking to buy child insurance plans or take out education loans for their children.”
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.