Jar, a savings and investments app founded in January 2021 by Nishchay AG and Misbah Ashraf, came with a simple proposition for users: you can buy digital gold; no bars at all. Since then, the app has allowed investors to start their portfolio in digital gold with amounts as low as Re 1 (US$0.013).
This made it easy and convenient for investment novices looking to save money. Investors loved the idea. As a result, the two-year-old company has beaten the odds in the funding winter.
In August, the company raised US$23 million in a Series B round. The clutch of investors included marquee global names such as Tiger Global Management and Rocketship. The valuation? A cool US$300 million—more than double the US$145 million in its US$34-million Series A round in January. The company was valued at just US$14 million about a year ago.
Jar’s funding wins and its big up-rounds make it an outlier at a time many startups are struggling struggling Inc42 Funding Winter: Indian Startups Record 90% Drop In Funding YoY In July 2022 Read more to raise funds—nearly 90% of the US$65 million it has raised so far has come in 2022.
What explains investors’ love for Jar? It’s the number of customers that seem straight out of a dream. The company claims its registered user base has grown to ~10 million in less than two years of operations—a feat few other wealthtech startups have managed.
While Jar claims to be a category creator in India, its customer growth hasn’t yet translated into big revenue. Not at least until mid-March, as per the company’s filings seen by The Ken.
Jar has not declared its financial results for the year ended March 2022. But the provisional numbers that the company had filed along with a stock-buyback proposal earlier this year, do not paint a pretty picture.
The company’s revenues are meagre, and its losses are heavy even by startup standards. Going by these numbers, investors have paid a very tidy valuation premium. In the August fundraise, the valuation-to-revenue metric is a staggering 4,800X.
For the sake of comparison, a similar metric for Tiger Global-backed wealthtech platform Upstox stood at ~63X, based on FY21 numbers, while it was ~25X for Acorns, a US-based micro-investing platform that offers round-ups like Jar.
To be fair, Jar is a young startup. The financials of the first couple of years may not reflect things to come.
The founders are also bullish. “Currently, we are clocking almost over 250,000 investment transactions every day.