Making teenagers financially independent: The story of ed-fintech startup Akudo
Bengaluru-based ed-fintech startup Akudo facilitates teens to start their journey to financial independence through its prepaid Visa card, accompanied by family-friendly controls and oversight.
In most middle-class Indian households, parents do not usually discuss money with children or teenagers. The story was no different for Lavika Aggarwal, Sajal Khanna, and Jagveer Gandhi.
Having been barred from understanding the intricacies of money — be it investing, saving, or spending — Indian teens are yet to become smart about money.
Bengaluru-based edtech-fintech startupis enables teens to become financially smart. Founded in 2020, Akudo believes in creating a fun, robust, and strong learning-first banking ecosystem for teenagers.
The startup facilitates teenagers to start their financial independence journey through its prepaid Visa card, accompanied by family-friendly controls and oversight.
Moreover, the digital wallet for pocket money helps teens build healthy spending and saving habits to better understand money.
“As a society, we have hushed any conversation around finances and money around our children. It’s taboo to expose or involve your children in financial discussions in the household, which has resulted in financially unaware adults who need guidance on investments and basic financial management,” explains Lavika.
Why financial independence for teenagers?
While working on a pitch for business stakeholders in the US at Capital One, Sajal and Lavika realised there was a massive gap in financial learning in 2020.
Developing a chatbot to help with loan delinquencies, Capital One’s onshore research proved that people were clueless about loans and their functions. The team realised the learning curve could be achieved at a much younger age while catering to digital banking for teenagers.
Lavika says, “One way or the other, everybody has to learn the order of money. So, why not when we’re under our parents’ supervision?”
She says Akudo is simple, easy, transparent, and full of wisdom, adding, “We also have a learning section that has loads of educational videos for teens, where they learn about money and get rewarded once they rise through the levels of the gamification model.”
“We didn’t expect this product to get acclimatised this easy, but teens love it. We also have an offers section with curated offers for that age group,” explains Lavika.
Akudo is a dual-sided app — one interface for teenagers to receive money from parents, and the other for parents to send money to their children.
A teenager can sign up on the app — available on both Android and iOS — after completing the KYC process. After confirming their details through a link sent to parents, the teenager can receive money in their prepaid Visa card.
The learning section on the app allows teens to unlock various rewards every time they watch educational videos on finance and can be tracked through the journey map on the app. The team charges a small fee and margin.
The need to start young
“Research shows, we form most of our basic money habits at a young age. In the real social context, we only develop any money management skills when we’re adults trying to manage our finances,” Lavika explains.
She adds, “We are trying to leverage tech to build a community of parents and children, which will have more prudent conversations and actions towards their finances to be financially responsible adults in the future.”
With the advent of globalisation, a large section of society is and will achieve a never-before-seen level of wealth in the history of mankind, leaving most of us dazed.
Akudo wants to help ease this process to help teens make better financial decisions, whether in the present or future.
In the fast-growing market for financial products and services for pre-teens and teens, several fintech players have found success with their offerings.
These include Tiger Global-backed Slice, a pay-later credit card for young adults; FamPay; and Junio, which offers digital financial access to individuals below 18 years.
While a few players in the market are catering to the same audience, giving out prepaid debit cards to teens isn’t a market disruptor anymore, Lavika says.
“We already knew this when we were starting up. We also knew we have to offer a bigger vision. Not just financial freedom, but financial literacy,” she says.
“Akudo’s learning centre holds a special place in the app. Here, members can watch bite-sized content and rise through the levels of becoming a ‘fin-wizard’. The feature is incentivised. It rewards the members for learning about money, trying to bend the habits of money matters,” she explains.
Market and funding
In September 2021, the startup raised $4.2 million seed round led by Y Combinator, JAFCO, and Incubate India, to name a few.
By the end of 2022, Akudo aims to reach over five million households, with an increased focus on building open financial communication among parents and children.
“There are more than 200 million teenagers in India, making spends of $50 billion annually, which will only increase over the next few years. It is integral to build a community of financially aware teens who will go on to make better financial decisions, and we plan to be the flagbearers of the cause and ensure the same,” says Lavika.
Edited by Suman Singh