Tiger Global-backed Jar is helping Indians to build a habit of investing, by rounding off their daily transactions and investing the spare change in digital gold. Starting with a familiar asset class (gold), Jar wants to help users understand the power of saving small and then later diversify into multiple asset classes.
With a user base of about 4.7 million users, the company has recorded an almost 20 per cent jump in users’ savings month-on-month; for example, people who save ₹500 this month, increase their savings to ₹650 next month and so on.
“If you look at the financial products in the market, the majority focus on high-intent users who are financially literate and have made up their mind about savings and investments. This user group makes up a very small percentage of the population. There is hardly any product designed for the rest of Indians, who are not financially literate and are still undecided about investing,” Nishchay Ag, co-founder and CEO of Jar told BusinessLine.
Founded by Misbah Ashraf and Ag in January 2021, Jar breaks down monthly investments into small everyday investments. The app removes the burden of knowledge and capital for the general masses.
How does it work
Jar allows users to start their investments from ₹10 and every time they make an online payment, a small round-off amount is added to their savings. Round-offs are calculated to the nearest 10 of the transaction amount. For instance, if a user spends ₹122 on groceries, Jar app automatically invests ₹8 from the user’s account in digital gold.
Users can also set up a daily savings mandate on the app, to put an upper limit on daily savings. They can also decide if they want to stop their savings at a particular point in time.
Further, Ag noted that the platform does not charge any fee from its consumers. “Our revenue comes from the commission we make from the supply side partners. In the long run, we will add other services like a line of credit, insurance, and all other financial services. With each service, the line of revenues will also keep increasing but the platform will remain free for users,” he added. Jar partners with Safegold to enable digital gold investments.
Defining Jar’s average customer, Ag said that most of them are new-to-income graduate individuals. “While we are consistently targeting this age group, at the same time our product has been accepted and being used extensively by all other age groups as well,” Ag said.
Till now, Jar has raised about $36.5 million in two funding rounds. Some of its investors include Tiger Global, Rocketship.vc, Third Prime, Stonks, Force Ventures, Arkam Ventures, WEH, among others.
Equanimity Investments-backed start-up Sqrrl also works on a similar model of rounding-off users’ daily transactions and investing the spare change into mutual funds.
Responding to this, Ag said that there is no novelty to any idea today. “There will be thousands before us and thousands after us, who will attempt the same idea, but what differentiates a platform is how accessible and user-friendly it is. Construction of an instrument is one art, selling and making people buy it, is another,” he added.