Neobank Juno raises $18M in a Series A round led by ParaFi Capital
Varun Deshpande, co-founder of Juno and a third-time entrepreneur, discusses the plans on the recent fundraise expansion plans, challenges of entering the US market, the future of De-Fi, and more.
Digital banking platform on Saturday announced that it has raised $18 million in a Series A round led by ParaFi Capital’s Growth Fund. Marquee investors Hashed, Jump Crypto, Uncorrelated Fund, Greycroft, Mithril, Antler Global, 6th Man Ventures and Abstract Ventures, also participated in the round
Last year, Indian entrepreneurs Varun Deshpande, Ratnesh Ray and Siddharth Verma co-founded Juno - an online banking platform that provides checking account with integrated Bitcoin as well as Ether crypto wallets for American users. The team had previously co-founded Nuo protocol in 2019, a decentralised lending protocol, but shut down in 2020 to pursue a more regulated approach to crypto, which would later become Juno.
The capital raised will be used to expand its digital banking offerings, besides its tokenised loyalty program. According to Varun, based on activities that the users do on the platform, they will receive coins from Juno, “Whether it's in paycheck with us, or spending with the Juno card, users will start earning these coins,” he explains. Further, these coins can be used within the platform and reedem for exclusive access to products and services, he says.
Expansion also appears to be on the table. “We will be expanding our US team primarily. In the future we will be a 150 member team. So that we can expand our product and service in the US,” Varun says.
Previously Juno had raised $3 million in a seed round from Sequoia India’s Surge, Polychain Capital, Consensys Ventures and Dragonfly Capital.
Recently the firm partnered with Ethereum scaling solution, Polygon to offer on ramp services in their checking account.
Indian startup finding its niche in the US market
The journey thus far for Juno has not been without its challenges, the first being finding a fit in the US market. “In the US, when it comes to launching a banking platform, compliance takes a lot of time. It is a 10 to 12 months of building process, we ended up launching just at the height of the pandemic. Later, it took another nine months for us to introduce crypto within that banking stack so that we could convince our bank partner on the regulatory compliance that we can handle this,” Varun says.
It found this in its offering to convert dollars to USDC and other cryptos. This, according to Varun, was the first time that owning a FDIC insured checking account along with crypto assets was possible. “Building a product from India for the US market isn’t easy,” Varun tells The Decrypting Story.
However, having previously founded startups, the three took note of their learnings to capture the bigger market “While working on the previous startups we were focusing on smaller markets and that gave us motivation to go after bigger markets not capped by market size. So, that is a big learning, when it comes to building Juno, we went after a massive market which is the US market,” he says.
So far, Juno has clocked in 75,000 users and is adding 15,000 accounts on a monthly basis. “Overall, from a transaction standpoint, we are processing close to around 100 million transactions on a monthly basis,” he adds.
This led to Juno being backed by some pertinent angel investors like Balaji Srinivasan (ex-CTO of Coinbase) and Surojit Chatterjee (CPO of Coinbase), Ryan Selkis (Founder, Messari), Sandeep Nailwal and Jaynti Kanani (Founders of Polygon), Sriram Krishnan (General Partner, a16z), Venu Palaparthi (President, FTX Capital Markets).
India, RBI and compliance
While the US was primarily on the radar, the company had considered other markets – particularly India. It was testing its product for Indian users, but due to regulations they had to drop the plan. “We realised that just combining banking and crypto is extremely difficult in India at this particular point, given that there is no regulatory clarity from the central bank. And one of the big things that we focus on while entering any markets is that we want to be one of the most compliant crypto companies in those markets," says Varun.
He further adds, “We are very deeply embedded with our bank as we have a checking account that essentially also comes with a crypto wallet. So that is possible only in slightly more developed markets, where there's more regulatory clarity, which is the US, Australia and maybe a few other places. So, we will just wait for more regulatory clarity from the Central Bank.”
Nevertheless, Varun is still optimistic on the potential of Decentralised Finance (DeFi) in the future, “In the future, users can take paychecks in stablecoins and spend these stablecoins the way they are accessing Fintech in the US with their bank account,” he says. Further, he expects India to be at the forefront of this sector in the near future.
Edited by Akanksha Sarma