Singapore-based Vertex Ventures has led a $5 million Series A investment in digital payments firm InstaReM, which focuses on providing and facilitating a platform for digital account-to-account cross border payments within Asia. Other participating venture firms in the funding round included Fullerton Financial Holdings (FFH) and Global Founders Capital (GFC).
Vertex Ventures is the venture capital arm of Singapore’s state fund Temasek Holdings, while FFH is a direct, wholly-owned subsidiary of Temasek. GFC is the venture capital arm of German Internet investment firm Rocket Internet.
In response to the investment, InstaRem co-founder and COO Michael Bermingham said, “Our robust proprietary technology presents the opportunity for small and mid-sized banks and payment providers a solution to expand their product offering into the remittance space.”
InstaReM will be using the investment for licensing, geographic expansion, scaling the product and technical teams and marketing, the company said in a statement.
It currently serves individuals, small and medium sized enterprises (SMEs) and financial institutions. Their senior management teamincludes Blaine Fabi (APAC
president), Mahesh Koirala (global financial controller), Amit Gupta (technical lead) and Ninad Bhate (global operations chief).
Commenting on the investment, CEO and co-founder Prajit Nanu, shared: “InstaReM’s fast, compliant and low cost money transfer solution has propelled it from an unknown brand to one of the corridor leaders in Australia. Our aim is to be the fastest money transfer operator to process $1 billion. We are extremely excited to have Vertex and FFH onboard and continue to receive support from GFC who invested in us when we were two guys and a powerpoint.”
Currently the average transaction size on the InstaReM platform is US$1800, with the transactions processed in a few hours compared to the standard span of 24 to 48 hours taken by other money transfer operators. InstaReM claims that a key differentiator in its business model is its focus on charging a percetage (<1%), unlike other operators who charge a transaction fee and fx spread.
Chua Joo Hock, managing director and general partner at Vertex Ventures, explained this as the appeal of InstaReM, saying: “Trying to do a startup in the fintech space is not easy, as you may need more finance background than technology to maneuver through the complicated industry. InstaReM not only develops a unique deep integration model with banks but also shows a very strong capability to execute, which are two important qualities that really excite us.”
InstaReM claims that within a span of less than a year of operating, their platform now accounts for 2 per cent of all remittances from Australia to India, with significant growth in other corridors. Currently, InstaReM is licensed in Australia, Hong Kong and Canada, while in the middle of applying for a license in Singapore, Malaysia, Japan, Luxembourg and some US states.
Speaking on FFH’s investments, Niap Juan Loh, head of finance at FFH, commented:“As an active operating investor in financial and related services across Asia and other emerging markets, FFH strives to stay ahead through its investments in market-leading innovation and creative financial solutions. In particular, our investment into InstaReM underlines our continued commitment in Fintech.”
Niap added, “We expect to bring shareholder value by sharing our expertise and creating synergies between InstaReM and our existing portfolio companies.”