Jupiter, An Indian Neobanking Company, Rejoices As The RBI Grants It An NBFC Licence.

A neobanking startup, Jupiter, has received a non-banking finance company licence from the (RBI), allowing it to disburse credit from its books. According to Jitendra Gupta, founder of Bengaluru-based Amica Financial Technologies Ltd., which manages the firm, Jupiter will appoint a professional chief executive officer.

This is an important milestone for Jupiter, which has previously mounted its lending operations through partner NBFCs.

Jupiter, funded by Sequoia and Tiger Global, plans to invest about Rs 100 crore in the lending company & raise an additional Rs 100 crore in debt to fund the non-banking financing company’s credit operations. It aspires to make short- and medium-term personal loans of around Rs 600-700 crore annually. According to Jitendra Gupta, the breakthrough is relevant in light of recent regulatory evolutions on digital lending. Given their existing client base of over 2 million, Gupta believes they will be able to operate at scale to achieve company development.

The NBFC licencing will improve the four-year-old fintech’s revenue pipeline & loan margins. It will even be allowed to serve consumers directly rather than only as a loan service provider (LSP). Jupiter also competes in longer-term loans spanning from three to 24 months, with ticket values ranging from Rs 75,000 to Rs 1 lakh. On Jupiter’s platform, the typical loan period is now less than six months, and the ticket size is about Rs 30,000. It has given credit to around 25,000 users. The company has raised more than $160 million in equity money so far and was recently valued at more than $700 million.

Jupiter’s loan wager.

Jupiter, which began as a neo bank, has been eager to develop a credit product. It started with Bullet, a credit product based on UPI rails that were phased off in 2021. Eventually, the firm resumed its lending activities through a partnership with Trillionloans Fintech, which operates the peer-to-peer lending platform Liquiloans. Jupiter has already created a loan book of more than Rs 100 crore in the five months since its debut, thanks to its earned wage access offering and personal loans to consumers.

EWA is a form of loan product that allows employees to get their paychecks before the regular payroll days. Gupta stated that Jupiter plans to formally deploy UPI on credit through partners, as this service is now exclusively available to banks.

Jupiter has now introduced a second income line in addition to investments and mutual fund distribution with a direct NBFC play. In collaboration with Federal Bank, it attracts consumers through new deposit openings and salary accounts.

In general, a bank works by initially assisting clients in opening liability (or deposit) accounts, creating connections, and then beginning to make revenues by lending or fee products (investments). Before introducing these items, they considered building a particular consumer base (1 million). Cross-selling will not function without an engaged consumer base, according to Gupta. Jitendra Gupta stated that they still have a four-year runway.

Jupiter’s operational income in FY22 was Rs 42 lakh, with losses of Rs 164 million. Gupta anticipates “solid revenue” by FY24 as new revenue streams ramp up.

According to Gupta, about 5% of the company’s customer base has already begun creating SIPs (systematic investment plans).

Jupiter’s shareholding structure.

• Jitendra Gupta (Founder) – 36.5%
• Sequoia Capital – 11.4%
• Matrix Partners India – 9.4%
• ESOP Pool – 8.1%
• Qed Innovation Labs – 4.5%
• Beenext – 4.2%
• Nu holdings – 3%
• Tiger Global Management – 2.8%
• The remaining 20.1% shares are owned by Rocket Internet, 3one4 Capital, Mirae Asset and Hummingbird Ventures.

Jupiter’s businesses.

Offerings are Digital savings accounts, credit, and investments through mutual funds.

• Operates 2.3 million deposit accounts currently.
• Almost 250,000 SIPs were added in March 2023 on the company’s list.

Conclusion.

As RBI grants Jupiter NBFC, it pledges to work more committed.