Exciting funding news- Neobank Jupiter announced a funding of USD 86 million
Funding is indeed the most important and crucial part of a startup!
Let us talk about funding and what role it plays in the lives of a startup. Funding can be explained as the way of putting in or investing in the cash in the startup. We have big investors, venture catalysts, angel investors, and whatnot. Funding opens up the opportunity for the startup to bring in new products and services to offer. It opens the gates for the startup to expand its place of offering and look into new and maybe international locations.
The funding brings in liquidity in the startup to offer something more to its employees. Funding overall brings with it too many new options to explore into. It helps in fulfilling the dreams and plans of the startup. But to achieve and secure funding, a startup needs to have a solid and strong idea that excites the investors to put in their money.
Since we talk about funding and startups a lot, we should be aware of some of the terms related to it. Some of the common terms related to funding are explained below-
Angel Investor– He is the one who puts his investment in a company in the early stage of a business. This he does in return for the share of the company.
Going Public- It is a way to introduce an IPO, which is the Initial Public Offering. It can be thought of as another way to raise funds for a company. It means shares of a company are offered to the public and the public became stakeholders for some portion of a company. Investments in an IPO is a risky game because it can be both profitable and a loss.
Incubator- These are like the support group for the startups that help them by providing the mentorship and required funding. In return for all this, they take an important share in the startup. In the world of technology, the incubators are treated equivalent to the new business schools.
Seed Round-This is also called the seed stage and is the first round of funding for a startup. This round of funding is for the development stage of the startup and the limit for this round of funding is USD 1 million. Post this round of funding, are the Series A, B, C, and other rounds of funding.
Venture Capitalists– A Venture Capitalist is an experienced and professional individual who makes an investment in the company for the exchange of some of the equity shares. The Venture Capitalist normally looks for the startups that are later in stage and have proven themselves to be worthy of the investment. The investment of the Venture Capitalist usually starts at USD 2 million per round.
Churn Rate- This is the rate that tells of the customers lost after the acquisition stage in a business model which is subscription-based.
Accelerators– An accelerator is a fixes-term program that is engaged in providing early-stage startups with financing, education, mentorship, and resources so that these startups grow into a business that is self-sustaining. They normally look for startups that have an established business model.
Crowdfunding– It is a type of financing where a group of high network individuals makes their investments in the business. A startup needs to show its business model, its project to a large audience and eventually convince them to invest in a startup.
Since we now have a fair idea of some of the terms related to fundings and startups, let us now discuss the funding of a startup that has taken place recently.
Announcement of funding of a startup
The startup, Neobank Jupiter, has raised a funding of USD 86 million, as announced on December 27, 2021. This round of funding was the Series C round of funding and was led by QED Investors, which is based in the US, and Sequoia Growth Fund. The other participants of this round of funding were the existing investors of the startup Tiger Global, Matrix Partners, 3one4 Capital, and BEENEXT.
The startup plans to utilize the funds raised in growing its customer base and launching its lending product in the year 2022. The value of the startup post this round of funding has increased to USD 710 million, which is an increase of nearly 2.5 times from the last time the startup was valued, which was USD 293 million.
That round of funding took place in August 2021 and was the Series B round of funding, where it had raised USD 44 million. That round of funding was led by Nubank Global Founders Capital, Sequoia Capital, and Matrix Partners India. Even QED Investors in that round had invested an extra USD 10 million. This round of funding is the second round of funding that the startup has gone through.
The startup in its Series A round of funding had raised USD 25 million from investors like Sequoia India, Matrix Partners, 3one4 Capital, Lee Fixel, who is the former head of Tiger Global, and others. This was the time when the startup was avoiding the attention and the eyes of the public.
About the startup that has recently received funding
The startup Jupiter was founded in the year 2019. Jupiter is a digital banking platform that is engaged in allowing users to open a bank account using digital modes, provides Visa debit cards, and insights and analysis on spending done by the customers. The startup is in partnership with Federal Bank and Axis Bank. It has its own license of the non-banking financial company (NBFC) and is planning to lend from its own book to provide a credit loan to individuals and personal loans.
The startup will continue investing in customer acquisition and has the aim to have a million customers by April 2022. It will also start entering into lending in the coming year. The startup has made it clear that it will start by giving loans to only that customers who have a bank account on its platform. It is expected that the credit requirements of such customers will be in the range of INR 10,000 to INR 3 lakhs. It will also do the risk- assessment, and underwriting for these loans with its in-house team and will also use credit bureau scores.
Talking about the financials of the startup, the loss of the startup has increased from INR 6 crore in FY 2020 to INR 14 crore in FY 2021. Revenues have increased from INR 5 lakh to INR 11.79 crore in FY 2021, which is a growth of 215 percent. Expenses have also increased from INR 6 crore in FY 2020 to INR 26 crore in FY 2021.
The direct competitors of the startup are Fi and Niyo. There are other players even operating in the industry such as RazorpayX and Open, which have their focus on small and medium enterprises.
About the founder of the startup that has received funding
The startup, Jupiter was founded by Jitendra Gupta, who is also the CEO of the startup. He is best known as the founder of Citrus Pay. Before Citrus, he had a good share of his financial work journey at ICICI. He is of a belief that banking needs reimagining. He is a big poker player, a movie buff, and is always up for interesting fintech ideas. He further has a team on which the customers can bank upon.
About QED Investors
QED is the premier VC in the fintech space. It is an operator which is famous and well regarded for its expertise, engagement, and empathy. It makes its investment in businesses that disrupt and empower. It says that innovation and operation are in its DNA. QED Investors was founded on the principles of bringing fairness, transparency, and access to financial services. It considers Feedbacks as one of the most important. This is the reason it regularly 360 itself to learn how it can be the best partner to its portfolio companies.
The philosophy followed by QED Investors is, “On their own, small hurdles are often easy to overcome. But stacked together, many small hurdles can present an overwhelming challenge, even for the best founder. We call this .8^5. It is our job to help companies improve their chances of success”. It has around 17 investment professionals and has invested in 13 countries, 154 portfolio companies, and 20 unicorn startups. It has invested around USD 662 million and has close to USD 3.0 billion under management.
About Sequoia Growth Fund
Founded in the year 2011, Sequoia Growth Fund is the closed private equity fund that is managed by Sequoia Capital US. Talking about Sequoia Capital, it was founded in the year 1972 and is an American venture capital firm, with its headquarters in California. The main focus of this venture capital firm is on the technology industry and has many investment funds including funds specific to India and Southeast Asia, China, Israel, and the US.
The venture capital has offices in Singapore, Mumbai, Bengaluru, Hong Kong, Shanghai, Beijing, London, Menlo Park, New Delhi, and Tel Aviv. Some of the big names where Sequoia Capital has its investment are Apple, Google, Oracle, Youtube, Instagram, Whatsapp, Zoom, Linkedln, and Paypal.
What has been said about the deal?
The founder and the CEO of the startup made a statement saying that the burn rate of the startup is very low, it still has 50% of the funds which were collected from the Series A round of funding left and the funds of Series B have not yet been touched.
He even agreed that the value of the startup is coming close to USD 1 billion, thus it is very close to becoming a unicorn startup. But he then said that the startup is not looking into funding in the coming 12-18 months.
The startup is interesting and looks promising. We wish the startup a stroke of good luck and a bright and successful future ahead.
Edited and Proofread by Ashlyn Joy