Sequoia and Tiger Global-Backed Jupiter Secures NBFC Licence

Neobank Jupiter obtains NBFC license and will use debt to promote lending business.

Neobanking platform Jupiter has secured a non-banking financial company (NBFC) license from the Reserve Bank of India to enter the lending business, which will double its disbursal rate this year, the founder of Jupiter, Jitendra Gupta, told Moneycontrol.

“We are working with NBFCs to lend money under the loan service provider (LSP) model, but the process is very cumbersome. It is not an easy model to earn financial income. With the new license, we can quickly expand our business,” Gupta said.

The startup will make loans under the name of Amica Financial Technologies, the privately held entity that operates Jupiter, Gupta said. “With this license, we will have better control over our destiny, integrate KYC directly, and be more accessible and formal to better serve customers and chase scale,” he added.

Gupta also said the license would help resolve many uncertainties and overcome regulatory hurdles.

“Today, there is some grey area around the FLDG (First Loan Default Guarantee) regarding digital lending guidelines, scrutiny of what is and is not allowed in digital lending, and lending app bans. There is a lot of uncertainty, and there are licenses; we can fix that,” Gupta said.

Through Trillion Loans NBFC, the company disburses small loans of less than Rs 50,000 with a 3-6 months tenure. However, with the new NBFC license, Jupiter will consider lending in the range of Rs 50,000 to Rs 1 lakh.

“We will continue our existing partnership and look at lending through both models for some time. We will develop new clients for NBFC licences,” Gupta said.

Founded by second-time entrepreneur and former banker Gupta, Jupiter offers a simplified user interface that allows users to deposit and withdraw funds. The company also offers debit and credit cards in partnership with traditional banks such as Commonwealth Bank.

“With the NBFC license, we can now even do co-loans with banks. This is a huge opportunity for us,” Gupta said.

In January 2023, Jupiter raised Rs 100 crore ($12.5 million) in venture debt from Alteria Capital as the startup seeks to expand and expand its loan offerings in India. In 2022, the startup raised about $87 million from Tiger Global, QED Investors, Sequoia India and Matrix Partners.

Jupiter will inject Rs 100 crore to develop NBFC products, and the startup will seek to raise an additional Rs 100 crore in loans from banks, Gupta said.

“We are injecting Rs 100 crore in our own equity and will raise the equivalent of bank debt,” he said.

Jupiter has raised over $160 million (Rs 1,300 crore) in private market funding since its inception in August 2019, with a total revenue of Rs 19.3 crore in FY2022. The company currently runs at a disbursal run rate of Rs 25 crore per month (approximately Rs 300 crore per annum).

“Our internal target this year is to pay around Rs 600-700 crore for the whole year, the revenue profile will increase, and you can earn 2-3% more profit with the license,” Gupta added.

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