Neobank Jupiter raises Rs 100 crore in venture debt from Alteria Capital

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Neobank Jupiter has raised Rs 100 crore (about $12.5 million) in venture debt from Alteria Capital as the Tiger Global-backed startup looks to scale and expand lending products with neobanking penetration low in India.

Jupiter would roll out multiple investments and credit-focused products in 2023 that would broaden the neobanking platform's basket of financial offerings, the fintech startup said in a statement on January 5.

The venture debt transaction, the first of its kind in the space, would help the startup leverage synergies across the Jupiter Group, it said.

"This partnership will act as a catalyst to our efforts of building an all-inclusive and innovative platform for cutting-edge financial services products,” Jupiter founder and CEO Jitendra Gupta said.

Jupiter's focus to expand offerings comes at a time when the neobanking startup, just like its peers, is struggling to generate revenue.

Moneycontrol reported in December that Jupiter managed to generate revenue of just Rs 40 lakh  in FY22, the second full year of its operations.

Jupiter, which raised more than $160 million (Rs 1,300 crore) in private market funding since its inception in August 2019, recorded a total revenue of Rs 19.3 crore in FY22, thanks to other income of Rs 18.9 crore, which includes interest on fixed deposits with banks and realised gains on quoted mutual funds, Moneycontrol reported.

Founded by Gupta, a second-time entrepreneur and former banker, Jupiter provides a platform with a simplified user interface that allows users to deposit and withdraw funds.

As it doesn’t have a banking licence, the company offers debit and credit cards in partnership with traditional banks such as Federal Bank.

In 2022, neobanks were a hot sector, which attracted investments worth more than $1 billion from venture capital firms across the globe, according to data by Tracxn. Neobanks offer a fully digital platform to customers and typically are mobile-first banks.

These firms lack banking licences and are thus not regulated by the Reserve Bank of India (RBI). Most of these firms, including Jupiter, have agreements with existing banks such as SBM (State Bank of Mauritius), DCB Bank, and Federal Bank.

Many fintechs, including Razorpay and IND Money, entered the neobanking space as it became popular in the country as a result of pandemic-led lockdowns, which gave a boost to digital banking.

Jupiter raised more than $130 million in two funding rounds in 2021, increasing its valuation from $100 million to over $700 million.