Gullak

The Turning Point is a series of short articles that focus on the moment entrepreneurs hit upon their winning idea. This week, we feature Bengaluru-based Gullak that helps users automate savings to invest in gold.

India is traditionally a nation of savers, but majority of Indians save in a “suboptimal and non-smart” way that fails to create wealth.

Towards the end of 2021, JusPay executives Manthan Shah and Dilip Jain were looking for the next big fintech in India, when they met their third co-founder Naimisha Rao through a common business network. 

Their  internal research revealed that there was a stark difference between how the top 2% vs the remaining 98% in India save and invest. As many as 200 million Indians save manually in assets that do not even beat inflation, and widespread financial ignorance and its consequences are responsible for this. 

In January 2022, this led the trio to start Gullak, a gold-based savings app, to democratise wealth creation and give every Indian smart and easy ways of creating wealth.  It allows users to save small amounts regularly and auto-invests those savings in 24-karat gold, and aims to serve the next 200 million Indians to create a “financially atmanirbhar Bharat”. 

“Wealth creation should be accessible to everyone, and we are constantly striving to achieve the same. Gullak aims to do to savings what UPI did to payments; we want to be the partner in people’s wealth creation journey,” says co-founder Dilip. 

Earlier this month, Gullak had raised $3 million in a seed round led by new investors YC and Rebel Partners, and existing investor Better Capital. Earlier, it raised $1.3 million in a pre-seed round led by Better Capital and angel investors such as Vimal Kumar and Sheetal Lalwani (co-founders at JusPay) among others.

The startup, which operates in India’s highly competitive gold market and competes with players such as Jar, Siply, Paytm, PhonePe, SafeGold, and OroPocket, was featured in Y Combinator’s Summer 2022 cohort along with 18 other Indian startups.

The co-founders say their strength in tech and product background reflect in the transparency and simplicity of the fintech app. 

“Gullak is made for Bharat; the design and features are all built for Bharat users. The product is easy to use, and users can start their savings journey in just 30 seconds,” Dilip says.

The startup launched the public version of the app in June 2022 and claims that digital gold purchases worth Rs 75 lakh have been made via its app.  Gullak claims to have generated a MRR of $12,000 and sold 28 kg gold till date. The daily gross transaction value has grown to Rs 22 lakh from Rs 2 lakh in seven months.

Building a financially Atmanirbhar Bharat

The Gullak app offers two major saving options. It provides a recurring savings option that allows users to save a fixed amount daily or monthly, to invest in digital gold. Users can set mandates via UPI autopay, enabling automatic micro-savings. It also enables  users to save spare change by rounding up the user’s daily transactions to the nearest tens and automatically  investing the change in gold. 

There are no lock-ins, and the user can withdraw their savings at any point – as cash or as gold delivered at home. 

The startup has partnered with Mumbai-based digital gold platform Augmont Gold to offer this gold investment feature and earns 1.5%-2% upfront revenue on each transaction from Augmont.

The savings startup recently launched Gullak Gold+, a latest investment option that allows users to earn the best returns on gold. Gullak Gold+ gives users an additional 5% gold every year on top of the historical gold returns of 11%. It does this by leasing/renting the gold to large jewellers who use it for day-to-day operations and in return give the users a monthly interest. 

For instance, if the gold price appreciates by 11% in a year, then Gullak’s Gold+ users can generate an extra 5% via leasing. This results in total returns of 16%, much higher than the gold returns one gets from other investment options like SGBs, Gold ETFs, gold funds, and many funds, the founders claim.

The minimum quantity of gold to lease is 0.5 grams. All jewellers are screened by Mumbai-based digital gold platform Augmont. 

“Gold leasing is a practice that has been prevalent in the offline market but is limited to a very small population (top 0.01% of India). The minimum quantity to lease has been upwards of 1kg of gold. Gullak is the first to digitise and democratise this as we give our users secure ways to create more wealth,” Dilip says.

The company plans to use the latest fundraise to expand its user base and increase its average revenue per unit (ARPU) by offering unique financial products and strengthening its current products. It also plans to invest in building a strong community and spreading financial awareness.