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FinTech for Gen-Z | Sambhav Jain @ FamPay
144 Plays4 years ago
Catch them young, watch them grow!
Great thought! But when it comes to managing money, it’s always the elders who have taken decisions. And that is the sole reason that as adults, people still struggle with savings, taxes and investments and why financial literacy in India is a tough nut to crack.
In this episode of the Founder Thesis podcast, Akshay Datt speaks with Sambhav Jain, Founder, FamPay, who is on a mission to provide financial freedom to teenagers.
Sambhav is a graduate of IIT Roorkee and always aspired to start his venture. He collaborated with Kush Taneja, his fellow batchmate, to start FamPay, which was selected by Y Combinator in 2019.
And within two years it has more than 2 million registered users and recently raised a whopping USD 38 million, making it the largest Series A fundraise in India by first-time entrepreneurs.
Tune in to this episode to hear Sambhav talk about how FamPay is empowering Gen-Z towards financial literacy with its high tech but an easy-to-use platform.
What you must not miss!
- Internships: A way of understanding how young start-ups operate.
- Experience of getting mentored by Y Combinator.
- How can one use a numberless card?
- Fundraising journey.
Recommended
Transcript
Introduction to Founder Thesis Podcast
00:00:10
Speaker
Hi, I'm Akshay Hi, this is Aurob and you are listening to the founder thesis podcast We meet some of the most celebrated sort of founders in the country and we want to learn how to build a unicorn
00:00:24
Speaker
Hi everyone. Hi Akshay.
Meet Sambhav Jain: Co-founder of Phampe
00:00:27
Speaker
I'm Sambaf. I'm the co-founder of Pampi.
Tech Evolution: Gen Z vs Previous Generation
00:00:33
Speaker
Have you heard the term Gen Z? It refers to people born in this millennium currently in their early teens to young adulthood. The last generation of great tech companies like Google and Facebook were born when the parents of Gen Z were adults.
Phampe's Growth Journey
00:00:48
Speaker
And now there are a new generation of tech companies who are catering to Gen Z. One such pioneer is the fintech startup, Phampe. Phampe is a combination of a fintech startup and a social media platform. And it is on fire.
00:01:03
Speaker
They have been growing like crazy and just a few months ago, they raised their Series A funding of a massive $38 million. This is the highest ever Series A fundraise by a first-time founder.
Sambhav's Personal and Academic Background
00:01:15
Speaker
And Fampay's founder and CEO, Sambhav Jain, is one of the youngest founders we've ever featured on the show. And he takes us through his journey of building up Fampay and making it into the massive success that it is today. Here's Sambhav telling Akshay Dutt about this wonderful journey.
00:01:36
Speaker
Okay, cool. So, where did you grow up? I'm from Chandrapur, it's a small town near Nagpur in Maharashtra. And I was born and brought up here, my nephew's schooling, and yeah, like everyone, being from a small town, there was not a lot of exposure. What did your dad do? What's your family background?
00:02:04
Speaker
My father is a civil contractor. So he takes tenders and contracts for let's say road construction and all of that. So yeah, like like everyone, we have to go to like one of the best colleges in India. And I was quite
00:02:25
Speaker
curious about science. Since the beginning, it was not like I was good at maths and science. I was always curious about it though. So yeah, IITs were the only option. Like you should prepare for IIT and all of that though. So yeah, that is where the journey began. I moved out of Chandrapur. How big is Chandrapur? Is it like Puna size? No, no, no.
00:02:54
Speaker
It's a district. It's not a village village, but in considered tier 2, tier 3. Smaller than Nagpur, of course, much smaller than Nagpur. But Api schools are tier. Were you like a movie buff growing up? Besides studying, what all did you like to do? Definitely.
00:03:20
Speaker
I used to watch a lot of content and much fun methods. It's more about just Bollywood and there was no Netflix, Prime Video, there was no OTG. So whatever used to come on the television, we used to watch that. But if I go back to school days, like six, seven, eight, like the early teens, in my early teenage, I was very curious about most of the things.
00:03:50
Speaker
I was actually a lot into dancing. So I used to just learn from watching videos, watching TV, and just trying to copy the Bollywood moves. And so I was quite into dancing and school. I used to do that. So actually, in a lot of cultural things, because my mom was also quite keen. So she put me into tabla classes and all of that.
00:04:20
Speaker
Okay. You were like pretty confident of being on stage. I mean, you know, dancing needs a lot of confidence. So obviously you must have been like on the more confident side of the spectrum. Yes. Yes. I think since the childhood only I have been moved of an extrovert and social person. I was never afraid of talking to new people. I used to make friends and I always used to hang out in groups and schools.
00:04:50
Speaker
So yeah, definitely that introvertism and that was not there. I was, I've been social since, since the childhood.
Early Interests in Business and Technology
00:05:01
Speaker
So early teens, did you think you'll be a startup founder? Of course, you'll be a startup founder. Definitely, if I look back, if I talk about the very early teens,
00:05:20
Speaker
I was very interested in automobiles, cars, and all of that. I was very interested in car company and will make the most sexiest cars and all of that. So it was all around business.
00:05:41
Speaker
it means that I will have to become a businessman and all. But as education proceeded to, math for science, I think it was more about just learning new things and exploring what's out there. In 10th, 11th, 12th, I was like, we have to, if I have to change my fate,
00:06:08
Speaker
I have to go to the best college in India and that was like IITs in our mind. I did not even I think understand the actual meaning of what what that exposure could be but I was like I have to explore things right there's nothing in this in this town that I can learn so yeah after that it was more about let's explore what's out there and college
00:06:40
Speaker
And even I think by the end of third year, fourth year, I did not really think that I'll be a founder right out of college. I probably would have imagined it like a few years down the lane, but didn't imagine it to be right out of college.
00:06:57
Speaker
So, I think I experienced Kesarath much of, was it like very, very transformational coming from a small town? What was, like, give me the highlights of those four years. Your college has been one of the best, best four years of my life. I think definitely IIT, going to IIT was quite transformational on
00:07:23
Speaker
looking at things very differently, getting exposure, understanding what start-ups are, what different, what the world is, how they're like.
00:07:39
Speaker
of college in our first year, I contested in the hostel elections and got elected. I went into campaigning and getting into all of that. So fortunately, I got elected as the social and cultural secretary of my hostel.
00:08:07
Speaker
And simultaneously, 11-12, there was a dance club at IIT Roorkee. I joined that. So even through four years of college, I have experienced a lot of things. And then two years later, in the whole campus elections, I contested again as for the post of general secretary of office, I got elected. And that experience had been like,
00:08:36
Speaker
very different, being in college and starting from the whole election process to getting elected and in that one year there were so many initiatives that we did for the college.
Entrepreneurial Ventures and Internships
00:08:52
Speaker
So, a different experience and that is when me and Kush actually worked on a product together.
00:09:01
Speaker
So while we were in college in our third year, we built an app which is called Appetizer. And it is the official Messing App of IIT Roorkee. So the problem was very simple. It was very simple. But my message was starting in the semester. And then they can have a meal for the whole semester. It doesn't matter whether you have it or not. You have paid for the whole semester.
00:09:28
Speaker
But what usually used to happen was, of course, they used to go to the canteen a lot of times. And senior party, they used to take treats from seniors. So the product was very simple. What you could do is download Appetizer. And once you log in using your intranet IDs, you
00:09:57
Speaker
We would get access, keep access, stream, hostel and all of that. And accordingly, they could see the whole week's menu, like breakfast, dinner for the whole week. And they could skip whichever meal they wanted just by a click of a button. You can just skip the meal.
00:10:20
Speaker
So, there are many users on the site, but there are many admin sites on the site for the mess secretaries, mess managers, deans and all of that, who could upload many weekly bases. But there are also feedbacks, feedbacks, feedbacks, feedbacks, feedbacks.
00:10:35
Speaker
and the best part was for whatever meals you skipped, you used to get money back for it. So this was the first product that we built together and it had a great impact. Tell me about Kush, like who is Kush and how did you guys meet? So, Kush is again, I would say a very passionate guy and Kush comes from Ludhiana. He's a Punjabi.
00:11:05
Speaker
So yeah, he's very passionate. He's into fitness. He's into cooking.
00:11:13
Speaker
The first year we met in the first couple of weeks, as I mentioned, the elections were very different. So when I contested, of course I went to Kosh and Ayush, Ayush is also from Ludhiana and he's the first person to join the team.
00:11:37
Speaker
right? He's from the same batch. So both of them are from Ludhiana. What we did was, so during the elections, of course, we went for the support and everything. We need to get all the votes from your branch and all of that. So that is when we met.
00:11:58
Speaker
So, how did you think that you want to do a start-up together? It was quite accidental. So, what used to happen was, obviously, in the first year, there was a lot of people trying to explore the internships.
00:12:25
Speaker
Again, we had interned at multiple startups, like I interned at Rebego, somebody said startups like Eon Learning, and then Hotstar. Why I push interned at startups like 1MG, ShareChat, V Street. So, I don't know what are the roles, my product role, marketing role, business role. Let's say, all the roles, my internships. After the first internship only, like, I think it's a similar story for both of us, we got clear here, learning those startups.
00:12:56
Speaker
So, the kind of impact you're able to bring, the kind of ownership you get, right. So, like internships, so start up, right. So, throughout the campus life, I think campus internship, though there were a lot of companies, the dream companies which came to the campus, like giving great stipends, right, giving a great social status within the campus.
00:13:23
Speaker
Even we did not even think of applying, right? We used to apply offline, just made a different startup founders to get into it. So, yeah, throughout the college life, it was very clear that startups, it got like clear, his startups is where all the excitement is, and market learning and growth fast too. So by the end of final year, I was like, I want to join an early CS startup and not
00:13:54
Speaker
not an MNC or not a big company. So both of us did not pursue placements actively. So final semester was a hot time. Most of the time I went into just discussing. I used to keep on finding different start-ups and just go to him and I was like, what do you think about the team? What do you think about the product? And he used to come up with two ideas. Like a
Addressing Financial Literacy in India
00:14:20
Speaker
few days later, I also started going with two ideas to him.
00:14:24
Speaker
The problem is real. I face this problem. So you can think something around this. Based on this, it was both casual. It's just like two friends having a chat in their hostel rooms. So what happened was, as placements kept on getting closer, I had to help my friends to clear the tests, interviews and all, right? So I had a reference to coding. I didn't know how to do coding. I just started preparing for that. So when we asked them, why are you coding?
00:14:54
Speaker
I know you don't like it. That's the typical response we used to get. We could not understand how is your life sorted. If you're not looking at different factors while thinking of a job, there are so many factors.
00:15:22
Speaker
If you have a company that has a package, then it will be secondary. But if you have a package, then people are even ready to go in mines in Assam, because they learn 30 labs. So, I think I hear that IIT should be one of the smartest kids in India. As a thought process, why are they just thinking about money and not the other things, right?
00:15:56
Speaker
So we realized they were just looking at money as a primary factor and money was important of course, but money was becoming the bottleneck to take the right decision. That is what we thought about it. So we just started
00:16:18
Speaker
thinking around it, why is this mindset? So though earning more money in the short term is nice, or no denying that, but in the long term, it's like in the long term, it's not fruitful if you're just taking a decision basis on money because one year later, you won't be the one who's getting promoted, who's growing, who's feeling a learning curve, right? Because we're just thinking about means months, you're getting into a comfort zone.
00:16:46
Speaker
every day going to the office not doing actual work and one year later you start figuring out now what to do what's what's next for me because all your peers are growing so now you go back to step one key should I do MBA to switch my career or what should I do right and that's a major problem I think with everyone so we came to a discussion where we were like no one talks about money the way it should be talked about right
00:17:16
Speaker
Since the childhood, be it banks, be it schools, be it parents, no one teaches financial literacy in India. There's no financial literacy in India. If you compare to the Western countries, there are concepts of pocket money, right? They might start working
00:17:48
Speaker
So they start earning for themselves, they feel financial independence. With this money I can earn this lifestyle. In which I can party this much, I can travel this much, I can shop this much whatever.
00:18:02
Speaker
Whereas in India, because there is no concept of pocket money. There is no concept of earning. Even if you forget about McDonald's, I think you can manage the social media page for someone. There are so many things you can do. But there is no concept of even earning or getting pocket money right.
00:18:28
Speaker
The biggest question is, how will I survive if I don't have a job when I get out? The confidence in me is at least survival question. It brought me with the Western countries. My confidence is that survival question is now I need to figure out what I want to do. Because financial literacy is not decision making. So if you look at... I don't really know that 3000 bhajke is
00:18:58
Speaker
I don't think finance is an impact, right? If I get my own pocket money, like saving 3000 bucks by cutting down my expenses on shopping and food ordering is not expensive. But at least I'll fight for what's what I really like. It's important for me to my skill sacrifices. Yeah, you learn to prioritize. But in India, my decision making my decision making independence or freedom, you get function
00:19:28
Speaker
about listening to your parents or listening to anyone who gets handicapped and taking the right decision. So decision making, we don't realize it, but if you don't have that freedom to handicap in terms of taking decision, that is how
00:19:46
Speaker
We were just having just two college students having this discussion, like on and on. We were just like any problem we used to brainstorm on.
Phampe's Vision for Digital Pocket Money
00:19:59
Speaker
We were just having these discussions. This is just how to look at money. How money is not
00:20:15
Speaker
allowing you to take the right decisions. So, we were like, this is a big problem. And for us, like financial literacy or independence was not the course that we had to solve. We were like, it's more of a life skill like cooking or driving.
00:20:34
Speaker
So we were like, let's, let's solve for this. Like, let's, let's bring in the culture of pocket money to India. Let's build something digital, just say parents pocket money, which the kid can learn how to save, spend budget, invest and all of that. And they think it through which they can spend. So this is an interesting problem.
00:21:01
Speaker
If you like to hear stories of founders, then we have tons of great stories from entrepreneurs who have built billion dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple podcasts, and subscribe to the show. But I mean, it sounds for two kids.
00:21:30
Speaker
who have not even passed out yet. It sounds very super ambitious. How did you feel? It's nice. I often tell this, it's nice when you don't have a baggage of experience.
00:21:57
Speaker
Right? And you wouldn't believe that even after our first fundraise, we were super ambitious and super aspirational. We have a very practical timeline in mind. We have a very practical timeline in mind.
00:22:24
Speaker
like considering the how we need to improve the support, operations, product bananime, tech bananime, auto ski marketing, launch, there's a 360 degree perspective to that. But back then year, college may, it was more about just the appetizer bananatha, right? We just thought building up banadi
00:22:48
Speaker
So it was like, what is the impact of the product? And college, I think if it seems achievable, throughout college life, actually, not at a startup level or a professional level, but at least in both of our experiences.
00:23:21
Speaker
So that gave us the confidence. And it was not more of a startup shadow. It was like here, this problem connects us emotionally. We feel that, okay, we'll be making an impact.
00:23:39
Speaker
Last semester, we had to figure out. But why Bangalore? We knew Bangalore was a startup people's system. From a job perspective, also like other startup founders, right?
00:23:54
Speaker
So Bangalore is an ecosystem. And being in Rodeky for four years, like campus has a lot of exposure in the sense. There were different clubs, there were good people, subambics. But urban cities are also disconnected. So we wanted to know here, actually, what kind of times have changed. And coming from a small town in Mumbai, Bangalore has changed.
00:24:22
Speaker
So we just thought, let's go to Bangalore and look at what is happening. And in terms of time to experience of the city, of the whole ecosystem, seniors and all that.
00:24:41
Speaker
So we were very clear that we were going to be clear. We did not have any demands in the BEC stage. That is how we looked at money. It was not about money. I think in the early stages, it was always about keep learning more.
00:25:05
Speaker
and learning and growing more. And I think even today we feel there's so much to learn. We have just been in very early stages of our startup. We used to just stop them and we were like, we are students of IT. We would like, we are working on a project and would like to interview for 10 minutes and all.
00:25:31
Speaker
So, definitely, they used to get excited. And that is where we got the golden insight. So, the 90% of the kids we spoke to, none of them had bank accounts.
00:25:56
Speaker
All of them had smartphones. They were using internet. They were already like spending on Swiggy, Flipkart, Amazon, Ola, Uber, Netflix, right? But none of them had access to even digital payment. So we were like, we borrowed their debit card or credit card. We told them, have you heard of UPI? They were like, no. Like, have you heard of UPI? And also they were like, yes, yes, we have seen people scanning and paying though. You don't do it. So they know we can't do it.
00:26:24
Speaker
then we don't have an account yes because to link upid you need to have a bank account right you can't get a credit card below 18 so it's told us things like we were shocked we were surprised here
00:26:54
Speaker
because it was very obvious how everyone has access to digital payments and we started researching more than we got to know like if you look at India's population 40% of India's population today around 40% is below 18 Can you imagine how big that changes whenever we are speaking about the next half billion users on the internet we often forget that majority of them are going to be minors and
00:27:20
Speaker
And do what he's building for them though they are the most tech savvy audience. Like I'll give you an example. Mary literally two and a half years. Right? She doesn't know how to read and write. But she knows he move on my YouTube concept, YouTube page. And even when she clicks, she she finds the right video looking at the thumbnails, though she can't read titles, she clicks on the video.
00:27:45
Speaker
And the best part is, she waits for 5 seconds until she skips ahead. She skips ahead. Though she can't read, she doesn't know that it's an ad. That is how fast these kids adopt to technology. They're very internet first.
00:28:13
Speaker
And it was crazy that they don't have access to even digital payments or like a like financial literacy independence to both do that. We don't give us access in here to even like digital payments and banking. Like let's let's solve for payments first. They're like this is the main key problem. And on top of it, we'll build on banking and all of the literacy and all of the independence.
00:28:36
Speaker
things that we want to build but you have to clear cut pain point and that is when we that is how like fan pay came into picture that okay we are going to build a payments app for teenagers and with that idea we applied to YC in our final semester so yeah that is when we applied to YC in our final semester through college and I remember Amara
00:29:04
Speaker
BTP, the BTEC presentation was on 7th of May.
Applying to Y Combinator and Product Development
00:29:08
Speaker
And Hamaran, 9th May for YC interview the Bangalore. Okay, so you got shortlisted for the interview. How, how much work is needed to apply for YC and actually get shortlisted? But look, you know, like, like, did you really work hard and create a fancy presentation and all that? I think more than
00:29:31
Speaker
Definitely, I wouldn't comment. Definitely idea, product and all of that, the market that you're targeting, all of that are all of that are important factors. But what I have realized in the last two years on all my interactions with YC is that they focus more on founders. I think they have a good sense on that is what they bet on. Because when I think about YC, I think about the founders' idea through the batch they pivoted.
00:29:59
Speaker
What made them shortlist you? Was it the IIT pedigree or what was it like? No, no, no, I don't think it was the IIT pedigree. They were just like they loved the energy and clarity we had for this idea.
00:30:19
Speaker
Manav, you really thought it through your research.net and... Yes, like with the limited resources that we had while being in college and especially India, say, like if you look at our previous batches before summer 2019, you wouldn't find young founders in the policy batch as young as us. So, that's what we thought. We thought, why is he shortlisted?
00:30:44
Speaker
I remember, at least we have got into the interview stage, which is like the 10% of the applications, 10, 15% of the applications. And now with this probably, we'll be happy. So we were not, we did not have IOPS, like, to be honest, right? We were like, let's give it our best. Let's try to answer whatever questions they might have.
00:31:11
Speaker
Right. So we used to just discuss questions like how are we different from different payments apps? What's going to be your revenue model? What's going to be how are you going to acquire the first 10,000 customers? Right. Are there any regulations? We just used to take it through. Let's try to find answers to them.
00:31:34
Speaker
Two to three weeks, we just spent on creating list of things that people would ask us, YC would ask us. We did some mock interviews. And kind of like a mock interview, definitely there was no direction. There was competition, regulations, etc. These were your seniors who were doing it. Seniors, YC alums, Twitter, etc.
00:31:57
Speaker
different YCLMs put out their calendars, you can just book a mock interview. So it was a great experience and interview Kibat. Again, we were not sure if our interview went really good or they were, or we are feeling it good because they did not grill us thinking, okay, their kids.
00:32:28
Speaker
But yeah, we had a good interview. I think they were quite satisfied with what the research we had done. Yeah, we got into YC and after that, definitely there was no looking back. So what happens once you get into YC? Is it like classes and then time to work on product? This helps you understand.
00:32:56
Speaker
YC, no, there are no classes. It's more of a, I would say, a kind of an accelerator program. And they give you money to spend on? They give you once a year. They have a standard deal. So they do seasonal investing, both Salmi Doba and West Karthain Badges, Summer and Winter Batch.
00:33:20
Speaker
And every startup that they invest in, they give once a year, approximately. So, this is like a crash force to entrepreneurship and all of that, but it's not true. It's more about this very hands-on. Whatever you're building, just build it. Whatever problem you're trying to solve, just solve it.
00:33:50
Speaker
And if you start up at an idea stage, at revenue stage, at just go to market stage, at PMF stage, the whole idea is that there is something known as demo day. Demo day is basically where all the startups gather and all the investors gather. And every startup is given 60 to 90 seconds to pitch their idea.
00:34:17
Speaker
And you have to pitch your idea in 90 seconds to all the investors and whoever is interested, you can start conversations with them and end up raising money for whatever you want to build. So the whole idea is that you have to utilize it in the next three months.
00:34:45
Speaker
Right? And every startup has a different goal. And everyone has a different goal in terms of we want to raise this much, we want to raise or not.
00:35:00
Speaker
It's very subjective case to case. So yeah, after YC, we got to know, okay, we have to actually, before demo time, we have to experiment something, validate all of that. So the next few ones are more about definitely navigating through the fintech space, understanding, how can we enable it? What are the kind of APIs we would need? Card launch,
00:35:29
Speaker
How can we get it manufactured? Do we need certain licenses, certifications, right? Company, corporate, Kannati. And there are some complications that we have to deal with. We have to be very careful about the skepticism. Whenever we used to speak to the bank, we had to pay 15 lakhs to make it happen.
00:35:57
Speaker
in payments and in FinTech. So, it was an interesting period. In the next two to three months, the Learning Cup was very steep. We had a product launch. We had to validate the experiment design. We had to understand how to go about fundraise and what are the terms associated to it.
00:36:23
Speaker
Right? What is a term sheet? What is a term sheet? You need people or not. From designing her logo to designing website. Lot of things. I would remember and cherish it for my lifetime. What is a term sheet?
00:36:53
Speaker
It's just completely unforgettable. And the first experience is always, like, it's always priceless. Right? For first experience, I think that's how you build everything with love. It's like your baby. Like you, you spoke to people in the industry, like your seniors and others about to understand
00:37:22
Speaker
the space and form a strategy basically these three months were spent in researching and forming a strategy researching and also validating like setting up the base for the company right by setting up the base as in we had to validate okay this is going to work we had to know so how did you did you launch an app and a card and all that like how did you validate we just it was a very hacky MVP
00:37:49
Speaker
through which the users could load money and they could do UPI transactions by using a payout API in the backend. Very simple product, just load money and you can do UPI transactions, you can scan and pay basically, which the kids could not do before.
00:38:09
Speaker
And how did you enable UPI transaction? By using a payout API from one of the PGs. So they have a payout API, you can basically make a transaction. Okay.
00:38:27
Speaker
So you like created your account like a sampay account and then people could load money that money would line your account and when they scan so it would go from your account to the okay yes got it. Right so so that is what we connected to the PGs you're like we just want to experiment otherwise definitely it's a paid API and all of that you're like you know experiment so as I mentioned we say if any
00:38:57
Speaker
possible, right? We used to try to look for how can we as an early startup, different investors get free for three months. So we did all of that. And
00:39:15
Speaker
When we launched our product in the seven days, we got a traffic of 35,000 users. How did the word spread? Did you advertise? No, we did not advertise at all. In just four to five days, we built an army of five interns. We designed a very quick brand ambassador program.
00:39:44
Speaker
Like every brand ambassador need to get five of their friends on board and all of that. And we had like 250 plus brand ambassadors in just like, like three to four days. And like some certification, basically. Yes, yes, yes. We did not pay anything upfront. And then the users who came in, if you refer a friend, you used to earn coins.
00:40:13
Speaker
And then after a certain, if let's say for every user that you refer, you used to get 18 coins and you could use 30 coins to burn a spinner. But it was a very, very...
00:40:34
Speaker
building that MVP to actually getting a team of interns, getting the word spread, designing posters, getting 250 brand ambassadors on board, and then expanding so quickly. And referral build karkefiruzko, we capitalized kandows, my coins build karna. It went crazy in just the first seven days. And yeah, we just stopped the experiment because of course, we did not expect that traffic. And
00:41:02
Speaker
And of course, as it was just an experiment, there was no partner and all of that. We just shut down the product, but that validation helped us to definitely raise our seed round. We raised a seed round of 4.7 million from Sequoia.
Phampe's Funding Milestones and Product Evolution
00:41:23
Speaker
And this was on the back of the 35,000 number, like that's a huge validation, not 35,000 in seven days. Yes, so that's a great validation. I think even seed round was more about the validation that we can execute things. Right, because definitely amnib
00:41:51
Speaker
I bought the incentivise, I bought the brand ambassador programme, I bought the reference pay, I bought some money and all. Though, like in $1 we used to get, I think, in just $1, 10 to 15 users. Right, that was how cheap the acquisition was. More than that, what it proved was that it wasn't enough for me.
00:42:15
Speaker
So then what next? So by this time you would have set up your company and all of that you had taken care of. Yeah, yeah. So by that time we had done that. And once we had funded our funding, we said, okay, this is huge. Once we had done that for a college, and it was like, it was a lot of fun.
00:42:45
Speaker
But in the first three months only we realized, okay, like before our fundraise that it would be nothing if you want to build a big company because even if you want to get two to three good engineers, they would take up 30, 30 lakhs as a salary at the minimum rate. So you have a lot of cost of tech, cost of human resource marketing, getting your cards manufactured, so many things.
00:43:14
Speaker
So the first thing we did was, of course, we shut down our first product, our MVP, and now we have to build it with all the compliance in mind, figure out the regulations, get the partner banks and all of that. We started building the team, we reached out to all our friends from IT rookie. So,
00:43:37
Speaker
So I told you about Appetizer. So in the campus there was a group called Mobile Development Group. It's called MDZ. Kush, Chirag and Harjod were part of that group. So the Appetizer that was developed, it was developed by Chirag and Harjod. So we had worked on that product together and
00:44:02
Speaker
And push had like, was 100% key, sure, we have to bring them on board. So, so yeah, we just got them in. And then we started building the product, building the team started figuring out how to go about launching the product and all of that.
00:44:21
Speaker
Yeah, by February 2020, everything was ready and we had the first version that could go out. We had a good go-to-market strategy aligned. We were planning to... Tell me details now. What was product-wise in one? What all did it include? It included getting your own card, getting your own scan and pay functionality and then doing peer-to-peer payments.
00:44:50
Speaker
So, it's like a full-stack payments app for KIL. But unlike other wallets or UBI apps, it was more about giving them a complete banking experience. So, if a bank has a UBI ID, or if a card has an ID, it won't make them feel like a payments app. We'll give them a card and a scan and pay functionality.
00:45:15
Speaker
They can see the balance and all that, like parents can transfer money and they can see the balance. Yes, yes, yes. So complete independence there and you're planning to go live in April right after the board exams. If money can't load over, like let's say you got kids to download the app, how would they take money from their parents?
00:45:37
Speaker
So the parents can send money directly to the kid's account. They can download the app themselves, right? They have their own view. So, yeah, the parent and kid both are part of the onboarding process. Okay, okay. And parents could also do like a UPI transfer to the kid and stuff like that. Correct, correct, correct, correct. Right, so that was the first version. But COVID-19 schools are manufacturing plants.
00:46:05
Speaker
and there was a complete lockdown and all of that so yeah we were like let's not launch the product right now we might end up investing a lot of money in growth and may not get the right ROI rate and how big was your team then like six seven members
00:46:27
Speaker
Okay, most from both of them from IIT zone, like your batch mates or? Yes, most of them, like the six of us, we call them the founding team. So, so yeah, the founding team was there, me and Goshwar there, that six of us and there were a couple of more engineers who had just recently joined, I think, in it hadn't even been two months. But this was a very small team, maybe four to five interns, apart from that.
00:46:55
Speaker
So yeah, we were like, let's hold on. Let's look at how the spending patterns are changing, how people are adopting to COVID, if schools are opening or not, and all of that.
Overcoming Challenges and Innovating with Phampe
00:47:08
Speaker
We realized our go-to market to a more online fashion. And finally, last year in August, I think it was around the same time we might have launched our product.
00:47:24
Speaker
So last year in August, we finally went live. And the journey has been amazing. After that, very crazy. In the first 8 to 10 months, you were growing like 100% month on month. And the card was free. You had to pay for the card. In the first month, for the first 1000 users, it was free. That was your growth hack, basically.
00:47:53
Speaker
go to market strategy to give the card free. That excited them, that made them feel like an owner because it's like, it's the first card in their life, right? So it's like, first bicycle across phone. It makes them... It's personalized with their name. It's personalized and also we launched India's first numberless card.
00:48:19
Speaker
So, why numberless? Would that be a problem if e-commerce transaction came out with a number? So, number app was there. So, what we did was, we were just brainstorming. It started as a design problem. So, when we were designing the card, we were trying to place the numbers on the card, on the front and the back. And trying to make the card look like this.
00:48:45
Speaker
And it just started from that conversation, what if, what if we just remove the numbers to cut the clean? And when we started thinking about it, taking it seriously, that even from a security perspective, it's, it takes security to a whole new level. Because if the kid is losing the card, no one gets access to the CVV fiery or anything.
00:49:10
Speaker
And in any case, when you're shopping offline, you're swiping the card from a pin and enter, but you don't need the numbers to be on the card. This is what you were talking about, that the advantage of doing something without experience. Correct, correct, correct. And so that naivety, right, it acts in your favor. Being naive helps you to be unconventional and to not accept, it's just a card with a number on it. And you're like here, I don't have any behavior with online shopping.
00:49:40
Speaker
I usually don't have my card handy. I used to, I have to go to my wallet, I have to go to my wallet, I have to go to my wallet, I have to go to my wallet, I have to go to my wallet, I have to go to my wallet, I have to go to my wallet, I have to go to my wallet, I have to go to my wallet, I have to go to my wallet, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to go to my phone, I have to
00:50:10
Speaker
Right? It's much more convenient. It's much more secure. And third, it's much more cold. Like a card is super cold. And fourth is... And they don't have to worry about like disclosing the numbers to anyone because card numbers in here.
00:50:38
Speaker
If you go and search vampay on YouTube, you'll see a lot of unboxing videos by kids organically. So we knew if we want to attract kids to this product, it has to be sexy, it has to be aspirational, it has to be cool.
00:50:56
Speaker
So we knew we have a brand of product called Bhoati Quality Banana Bodega because these are the kids who from day one have been using YouTube, Netflix, Instagram. It's a very different generation. They can immediately tell which is a poor-built product. And also
00:51:19
Speaker
We had to beat the banks, of course, right? Banks for kids, or at least the mindset that kids had regarding banks or payment. They find it very boring. No, I don't want to do banking and all. It's very serious for them. So we had to make it cool. We had to make it fun, right? It's simple.
00:51:42
Speaker
So how long did it take you to get the first 1000 with all these hacks like the unboxing friendly and the influencers outreach? I think we hit the first 1000 and first four to six weeks only. It took us four to six weeks. And how tedious was the KYC and all like to get the first money into your account? That's a I think that's a bit tedious. I think that's a challenge for all the index KYC we bring certain drop off
00:52:12
Speaker
in the journey because people are lazy to do it. They're just like, okay, I'm talking to you. People take it much more seriously. Why are they asking for my document? Is it secure or not? So I think crosswind that document. And even parents to build that trust, right?
00:52:46
Speaker
It's very normal even in India So yeah, that's that's a bit That's a bit tedious the whole KYC and getting the first getting the first transaction and
00:53:06
Speaker
So this four to six weeks for getting thousand in these are like thousand people who finished the KYC. Okay and from that thousand how did it grow? Just as I mentioned it was growing like hundred percent month on month. So like September you had thousand like August you lost.
00:53:32
Speaker
Then like 2000, 4000, like that was the trajectory. Yes, yes. It was, it was multiplying. Like in certain months, like average was a hundred percent, but in certain months we had three X, four X and coffee faster. So we have more than two million registered users already on the platform.
00:53:58
Speaker
So, but registered user is someone who's downloaded or signed up the app but not done the KYC. Correct. Then tell me about the next fund raise. Like that's the next milestone in the journey, right? Yes. So we recently closed our series. We raised 38 million from Elevation Sequoia and a few other investors.
00:54:27
Speaker
I think we started having the first conversations in February or March and we were very sure by the end of December that we have hit PMF.
Series A Success: A Major Milestone for Phampe
00:54:39
Speaker
This product has a great product market fit and people wanted it. We were seeing a good
00:54:46
Speaker
number of kids using it regularly. We were seeing a good retention. The volumes were growing great. The growth rate was also crazy. The kind of feedback we were getting from the users, how they were putting in unboxing videos, the pictures they were putting on Instagram stories and all. These are the signals. It's combined. We were very sure. OK, now we have a PMF. Now it's about scaling this.
00:55:14
Speaker
and that is when we started to have the conversations and and this was again inbound like you the VCs were already aware of you and yeah i think we kept on chatting throughout the last couple of years even if those investors were not on our cap table i think
00:55:45
Speaker
So we were aware about the progress and everything. And it just naturally happened. We started having the conversation. And yeah, that is what triggered our series A. And we just closed it about one and a half months back. A couple of months. And which I think is the third largest series A ever done in India, right? Like $39 million.
00:56:12
Speaker
Yes, 38 million dollars. Which is like, I mean, it's like such a massive achievement for someone so young. Yeah, we did not know that it's like one of the largest. And like, we were also reading some article. It's largest by first time entrepreneurs or
00:56:41
Speaker
Definitely, it's a great milestone. What contributed to such a massive series? Everything.
00:57:00
Speaker
Everything. I would say everything like the product, the growth, the team, the kind of energy the team has, how we have executed things, the marketing brand. What was your team by the end of last year, like 2020, December, January 21? It was small, I think 30, 35 members. So yeah. And these were like either tech or marketing? Yes, correct.
00:57:26
Speaker
So for the kind of thing, the kind of growth and the things we pulled off with such a small team with the kind of expenses and the kind of P&L we had, I think everything contributed to this. And it's a very new market, right? As I mentioned, nobody else is building for teenagers. If you look at all the products in the market today, everyone is focusing on adults.
00:57:57
Speaker
And if you have to build for teenagers, I think the approach has to be very different. With a lot of teenagers, mostly they end up targeting parents, right? That wouldn't work, because in our times we used to ask for probably remote control cards and get happy.
00:58:19
Speaker
And it's the next big market because every year millions of kids will get their first smartphone and it's basically we are tapping the future adults, right? So, yeah. So, okay. I want to understand what is the business model that, you know, when you were
00:58:48
Speaker
doing those discussions with VCs for the series A, obviously you had to show them how you will make money. So what is that? Currently, we earn through two ways. For every sale of card, it's not given for free.
00:59:10
Speaker
Okay. Okay. And second is what do you charge for the card? So we just launched a new set of cards. We again launched something very new. We launched India's first Doodle number. Let's start with Visa. And it's called Fam card me. So, so we have two segments of card. It's one is Fam card and one is Fam card me. So the fact that means more premium version, doodle a highly personalized where kids can design their own card with choice of their doodles on it.
00:59:41
Speaker
So that card is charged at 1000 for a one-time fee and the normal time card is charged at 500. So we are on that and secondly for every car transaction we are on interchange. So those are the two ways we are running right now. So you know these are your current offering is essentially like a
01:00:10
Speaker
bank account substitute for teenagers right like and what is in your product roadmap now like what else do you plan to add because as teenagers grow and become adults and take up their first jobs then obviously you would want to be with them throughout the journey yeah so that's the exact thing which i think you were asking right what's the roadmap even the investors were asking and this is the most exciting part that
01:00:39
Speaker
We are not looking at losing the customers like once they turn 18 and the idea to grow as our users grow. And so there will be a lot of interesting things that we'll be launching in the next 12 to 18 months for that cohort of users who graduate into becoming an adult. So yeah, let's keep it a surprise. There is a lot of exciting things we are planning.
01:01:08
Speaker
So what's like a, I mean, you know, long-term view, like, say, by 2030, where do you see Phampe, you know, by that time? So, you know, we don't need to go into detailed stuff, but, you know, more broad big picture view of where do you think Phampe will be by 2030? The big picture, I think, the big picture is that we want to be that the whole financial ecosystem for
01:01:37
Speaker
for the Gen Z, right? Like a bank replacement, like say, I say, I see a bank, I have an account with Fampi, which has everything that I need over there. Yeah, we would want to be the one-stop solution for them, that all the demands are met through us. But of course, that's very far. In 10 years, we are more focused towards
01:02:06
Speaker
our mission right that how do we take the Gen Z one step closer to financial independence and financial literacy. So a lot of our decisions would be driven by that. And what do you plan to use this funds for like headcount increase or like marketing spend or what?
01:02:28
Speaker
So definitely investing in growth, growing from here, whatever our milestones are for the next 12 months. And getting the right resource will be hiring and expanding the team quite extensively in the next three to four months. We have already started hiring. So hiring, growth, and even launching the new products, we are investing some money there.
01:02:58
Speaker
but majority of the cost is going to be definitely investing on growth and marketing and hiring. How big is your team now? We are close to 50, 55 full-time members and 20 interns close to 20. What do you see it by end of year? Depends here. I think we are looking at
01:03:27
Speaker
For the next three to four months, we are at least looking at 25 to 30 more hires across different functions. So how are you building up the organization? Are you building it as a remote company, or you want to build it as a company with an office-based culture? I want to understand your thinking on building FAMPAs organization structure.
01:03:57
Speaker
Yeah, we are still fighting or arguing on whether we want to be a remote first company or a office first. And they're both perspectives to it. So we are figuring out a middle way where, right, like,
01:04:24
Speaker
In a year, we would do kind of a three month vacation for everyone at a location. And the rest of the year, it can be a remote or however you want. You can just spend three months at home and come back. We'll always have the office open, but it's not mandatory, at least for the next six months. Yeah, but it's subject to change. We are still deciding on
01:04:54
Speaker
how to go about it. And like in terms of your people strategy, like what kind of people are you looking to hire and are you looking at a flat organization or like, you know, how will you like, you know, say if you hit a headcount of 100 people, how do you think you'll manage that? Yeah, I think it's it's, we have had this discussion internally with me and Karsh.
01:05:22
Speaker
We feel that we'll let it evolve for the time being. I think it's it's every startup has its own unique org structure and way of operating. And we feel it's it's not about titles that define it's more on the way how you operate, right? So we are giving it time. It depends on the kind of people we hire and guesses of functions evolve over there.
01:05:52
Speaker
We let it evolve and it's more about just creating a culture. We are more focusing on creating a healthy culture where everyone has certain freedom, certain ownership, certain accountability, right? It's more about creating that healthy work environment with the right freedom and ownership. Less about org structure. We are letting it evolve on its own.
01:06:17
Speaker
We have spoken to a lot of founders and every company to some extent has a very unique org structure. So my last question to you, when do you think you'll become a unicorn? Or is that something that you don't think about? Honestly, we don't look at a time frame for that.
01:06:39
Speaker
We have other milestones in our head. I think becoming a unicorn is more like a outcome or a byproduct of our growth. So we are more chasing, we are trying to chase the kind of milestones we have planned. We want to reach X number of active users or this Y volume. But yeah, it's never for
01:07:14
Speaker
It's more about chasing that growth and chasing our mission. So very less conversations even between me and Koshar within the team on UNICON company and all of that. Obviously, the team brings it up. But it's more or less
01:07:38
Speaker
always comes up as a joke but we don't discuss it. I wish I could tell you all to go and download the Fampi app right now but it's restricted to only people who are 19 years or younger and I'm sure a lot of you out there would not qualify but do tell your younger relatives and friends about it and I'm sure they will thank you for it.
01:08:08
Speaker
If you like the Founder Thesis Podcast, then do check out our other shows on subjects like Marketing, Technology, Career Advice, Books and Drama. Visit thebotium.in that is T-H-E-P-O-D-I-U-N dot I-N for a complete list of all our shows.
01:08:28
Speaker
This episode of Founder Thesis Podcast is brought to you by Long Haul Ventures. Long Haul Ventures is the long-haul partner for founders and startups that are building for the long haul. More about them is at www.longhaulventures.com.