The global fintech market was valued at $133.84 billion in 2020 and is expected to grow at a CAGR of 19.50% to reach $556.58 billion in 2028. The Indian market is estimated at $65 billion and is expected to grow at a CAGR of 21.1%.
Although the market holds such high value and the entrance of UPI has only added to the increase in spending via digital methods, a set of numbers contradicting this was put in by Ronit Harisingani and Shardul Saiya. The duo found that less than 3% of the country has any formal method of investing. They found two main reasons for it: the first being the absence of the habit of investing and the second- the long on boarding and verification process.
In order to bridge this gap and to make investing available and accessible for tier II and tier III cities, Harisingani and Saiya set up Spare8 in 2020. This Mumbai-based company allows users to automate investments and create a daily savings habit.
The platform allows users to purchase gold in small increments, as low as Re 1. Since all the investments are made on gold, the users can get stable returns. The platform also provides real time market updates, daily reward system, and user-based offers. The app is available in two languages currently and plans on adding a few more regional languages in the coming years.
The onboarding process of the platform is fairly simple, the user can choose to log in via WhatsApp where the WhatsApp number is used and an OTP is not required or using a phone number where basic details have to be filled like the user’s name, age, PIN code etc.
The platform does not have a holding period, meaning there is no process time. The money is credited directly into the user’s account and a withdrawal can be made immediately after an investment.
The platform charges a 2% commission on every rupee that is invested through the platform. This commission is provided by the Digital Gold provider Augmont. This technically means, the platform fee or commission is not paid by the consumer, and they get market value gold for the amount of money invested.
Spare8 raised $800k in its pre-seed round in 2022. The round saw participation from 2am VC, Magic Fund, Incisive Ventures, Broom Ventures, Varanium Capital, Ajay Adiseshan, Yagnesh Sanghrajka, Anoop Mathur, Jaydeep Deshpande, and Sachin Seth.
With a current valuation of $3.3 million, the platform has a current run rate of $5200 and a 30% month-on-month growth. It has a total of around 300k downloads out of which it recorded 145k downloads in the last 90 days. The platform sees an average of 3 transactions every 60 seconds. The platform has a gross merchandise value of $100k and registers approximately 1100 users on a daily basis.
A couple of months back, the platform saw a stark spike in the amount of money invested per day. What was previously Rs 10,000 per day had risen up to Rs 15 lakhs. Co-founder and CTO, Saiya told Entrackr, “We had a few daily rewards that were on at the time. Our platform was covered by an influencer on YouTube; we don’t know how they came across us…but they brought in about 17,000 referees in over two days.”
Since the focus is on tier II and tier III cities, the platform is focusing on building a savings habit to then convert it into a wealth creation platform. It also plans on incorporating the various products and features that fall under digital gold like leasing, credit, and gamification. It additionally aims at building a tech stack on top of digital gold.