Indian fintech Jar turns profitable by enabling millions to save in gold

Jar, an innovative fintech startup from India, has successfully turned a profit by enabling millions of novice savers to invest in gold via its user-friendly app. Unlike many consumer fintech platforms that cater primarily to affluent urban populations or focus on credit products, Jar has made significant strides by providing a culturally resonant asset—gold—as a simple entry point for saving. Founded four years ago, Jar targets low- to middle-income individuals, a demographic often overlooked by traditional financial institutions. Users can start saving in gold for as little as ₹10 (approximately $0.11) a day. This strategy has propelled Jar to impressive growth, amassing over 35 million registered users across 12,000 postal codes, as revealed by co-founder and CEO Nishchay AG in a recent discussion with TechCrunch. Notably, around 60% of its users hail from smaller cities and towns, with more than 95% saving formally for the first time. The financial metrics of the startup illustrate its positive momentum. According to sources familiar with the situation, Jar is contemplating an IPO in the coming year, with investment bankers already in talks regarding this opportunity. The company's operating revenue, primarily derived from its gold-saving app, surged ninefold in the fiscal year 2024, reaching ₹2.08 billion (approximately $23.6 million). Even more striking, the overall revenue across all business lines soared to ₹24.50 billion (about $279.3 million), marking a staggering 49-fold increase from ₹500 million ($5.7 million) in the previous fiscal year. This total revenue encompasses earnings from digital gold transactions, jewelry sales via its Nek platform, and fees from partnerships with third-party distributors. The jewelry segment plays a significant role in this diversified revenue model. Launched early last year, the Nek platform offers a variety of jewelry, including gold, silver, diamonds, and lab-grown alternatives, covering over 8,000 postal codes and achieving ₹1 billion (around $11 million) in annual revenue. Jar has maintained profitability after tax for the last two consecutive quarters, a feat that Nishchay attributes to a strategic pivot. Previously, Jar operated mainly as a distribution platform collaborating with a third-party digital gold provider. However, the startup has since vertically integrated operations by developing an in-house tech stack to directly purchase, store, and manage gold. This shift has enabled Jar to control more of the gold value chain and distribute its gold through third-party platforms, including PhonePe, a fintech firm owned by Walmart. Earlier this year, the Bengaluru-based startup established partnerships with BharatPe and Unity Small Finance Bank, allowing users to make direct digital payments via the Jar app using India’s Unified Payments Interface (UPI) system. This initiative not only diversifies Jar’s revenue streams but also enhances user engagement by extending the app’s functionality beyond gold savings. Jar has also embraced UPI AutoPay, a feature introduced by the Indian government in 2020 that facilitates recurring payments on the UPI platform. This feature has been instrumental in driving repeat transactions, with Nishchay stating that daily savings is a key highlight of their app, which engages a diverse user base. The user demographic ranges widely, encompassing skilled professionals, small business owners, and daily wage workers, including electricians and construction laborers. The app supports nine Indian languages, making it accessible to users across various educational and income levels. Additionally, Jar has designed its app to offer a tailored experience, employing gamification and nudges to encourage consistent gold savings. With notable investors such as Tiger Global, Tribe Capital, Arkam Ventures, and WEH Ventures, Jar has raised $63.3 million to date and was last valued at over $300 million.