The macro problems for India’s microsaving platforms

When microsaving platform Jar appeared on the scene in mid-2021, investors were sold on the premise. The Bengaluru-based company’s uncomplicated and beginner-friendly investment offering—save as little as Rs 10 a day in the form of digital gold and watch it compound in a safe-haven asset—saw it raise a seed round of $4.5 million mere months after its launch.

Just six months later, in February 2022, Jar saw American VC major Tiger Global enter the company’s cap table, leading a $22 million Series A round. That saw the company’s valuation jump to $170 million even before it had completed a year of operations. The Covid funding boom would see Jar’s valuation jump to ~$314 million in August of that year, as Tiger doubled down on its investment in the app, leading a $34 million round in the company.

Since then, however, the hype around Jar and the wider microsavings space has largely died down. While others, such as Noida-headquartered Gullak and Pune-based Deciml, have also entered the space, funding has slowed to a trickle. 

Indeed, while a total of $70 million gushed into the microsaving space in 2022, according to market intelligence platform Tracxn, the following year saw only $3.35 million in funding for microsaving companies. 2024 has been even drier, with microsaving companies raising just north of a million dollars in funding.