Jitendra Gupta, founder of Bengaluru-based Amica Financial Technologies Ltd., which runs the startup, told ET that Jupiter will hire a professional chief executive officer to run the NBFC.
The development is significant for Jupiter which otherwise has been scaling its lending operations through partner NBFCs.
Sequoia and Tiger Global backed-Jupiter intends to capitalise the lending business with around Rs 100 crore and raise an additional Rs 100 crore in debt to fund the NBFC’s credit operations. It aims to hit annual disbursements of Rs 600-700 crore in short- and medium-term personal loans.
The NBFC will be housed under Amica Finance, a separate entity.
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Talking exclusively to ET, Gupta said the development was significant in the backdrop of the recent regulatory developments on digital lending.
“Considering our existing customer base of over 2 million, we will be able to operate at scale to drive business growth,” Gupta said.
The NBFC licence will help the four-year-old fintech’s revenue pipe and increase margins in lending. Further, it will be able to directly serve customers instead of working as just a loan-service provider (LSP).
Jupiter is expected to play in longer tenure loans ranging from three to 24 months, with higher ticket sizes of Rs 75,000 to Rs 1 lakh. The average loan tenure on Jupiter’s platform is currently less than six months, and the ticket size hovers around Rs 30,000. It has disbursed credit to around 25,000 users.
The firm has raised over $160 million in equity funding till date and was last valued at over $700 million.
Jupiter’s lending bet
Having started as a neobank, Jupiter has been keen on building a credit product. It started with Bullet, a credit product built on UPI rails, but was discontinued in 2021.
Eventually, the company relaunched its lending operations by partnering with Trillionloans Fintech, which operates the peer-to-peer, or P2P, lending platform Liquiloans.
In the five months since relaunch, Jupiter has already built a loan book of more than Rs 100 crore through its earned wage access (EWA) offering and personal loans to users, the company said.
EWA is a type of a lending offering which allows employees access to their salaries before the scheduled payroll dates. Gupta said Jupiter will be looking to formally launch UPI on credit through partners, as the service is only available to banks.
ETtechNow, with a direct NBFC play, Jupiter has added a second revenue line beyond investments and mutual funds distribution. It brings in customers through new deposit openings and salary accounts in partnership with Federal Bank.
“Generally, how a bank works is it first helps customers create liability (or deposit) accounts, builds relationships and then starts building revenues through lending or fee products (investments). If you notice, we looked at creating a certain base of customers (1 million) before launching these products. Without an active customer base, cross sell will not work,” Gupta told ET. “We still have a runway of four years,” he said.
In FY22, Jupiter clocked operating revenue of Rs 42 lakh, with losses of Rs 164 crore. Gupta expects “solid revenue” to come in by FY24 as new revenue lines pick up.
“Almost 5% of our user base has already started opening SIPs (systematic investment plan) on Jupiter,” said Gupta.