Startup News & Analysis

Australia-launched fintech startup InstaReM raises $27 million in first half of Series C, as it gears up to IPO

Stephanie Palmer-Derrien /

InstaReM

InstaReM co-founder and chief Prajit Nanu. Source: Supplied.

Cross-border payments startup InstaReM has raised US$20 million ($27.6 million) in the first half of its Series C round  and it’s not finished yet.

The startup closed the first part of the round while waiting for final negotiations and due diligence processes to be completed on the second half. Expected to close in January 2019, the second half will bring the round to a total of US$45 million ($62.09 million).

Founded in 2014, the Singapore-based fintech first launched its services in Australia in 2015, more than a year before it launched in Singapore and Hong Kong.

In March 2016, InstaReM raised US$5 million ($6.9 million) in Series A funding, followed by a US$13 million ($17.94 million) Series B round in July 2017.

This latest round is led by MDI ventures, the venture capital arm of Telkom, and Beacon Venture Capital, the venture capital arm of Thai banking group Kasikornbank. It also includes existing investors Vertex Ventures, GSR Ventures Rocket Internet and the SBI-FMO Fund.

Speaking to StartupSmart, InstaReM co-founder and chief Prajit Nanu says the timing of the Series C round is “absolutely correct”.

The Series B funding helped the startup “gain steam in new markets”, he says, particularly on the consumer side of the business. At the time of that raise, the startup was active in four markets, he says, and now it is in eight.

Now, it will focus on the institutional side of the business, he says.

“It’s the right time for us to invest in the business.”

The funding is pegged partly for marketing and investing in the brand, and partly for bringing new staff members on board to help it grow within its existing spectrum, Nanu says.

However, InstaReM will also invest in product development, specifically for its enterprise and institutional offering.

The startup has recently been granted principle card-issuing licences in Singapore and Europe, and is now focusing on growing that side of the business out as well.

“We’re growing in the right direction,” Nanu says.

Although InstaReM is based in Singapore, it’s still Australia that represents its biggest client base.

“It’s a very interesting market,” Nanu says.

“There has been a change in the Australian mindset, with a lot of digital banks coming into place, and value created in new products,” he says.

It’s a small market, but an important one, he adds, with clear and simple regulation, and regulatory authorities that are willing to engage with fintechs.

“Those are very positive things that you learn from Australia,” Nanu says.

“It’s a great place to test any product … you don’t have to spend millions of dollars on acquiring customers,” he adds.

The right exit

InstReM is now looking ahead to an IPO, on the New York Stock Exchange, which Nanu and the team expect to happen in 2021.

For a startup like InstaReM, an IPO represents “the right exit for an investor”, Nanu says, and it’s been on the cards since the Series B raise.

“At the scale of what we’re doing, it makes a lot of sense for us to focus on the right exit … that’s what a startup is supposed to do  provide returns for its investors,” he adds.

To get to that point, all Nanu is focusing on is increasing revenues. He doesn’t reveal what the startup is bringing in now, but says it will be ready for the IPO “once we start taking $8 to $9 million in revenues, monthly”.

“We’ve done all the hard work,” he says.

“Now we need to get more revenues in and grow the business.”

You’re not superhuman

For other startups hoping to grow quickly and raise millions, Nanu’s primary piece of advice is to “build a strong core team, because you can’t do everything yourself”, he says.

“The thing some startup founders don’t realise is that they’re not superhuman,” he adds.

Founders should invest time into hiring, making sure new hires are a good fit for the company, he says.

Finally, while startups must believe in their own mission, it’s also important for them to pay attention to financial metrics.

Sometimes, founders can get caught up in the hype around their startup, “rather than building a credible business”, Nanu says.

“You have to have all those numbers baked in,” he adds.

It doesn’t matter if a startup is not profitable, as long as profitability is an achievable goal in the end, he says.

“From day one, you have to have a path to profitability”.

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Stephanie Palmer-Derrien

Stephanie Palmer-Derrien is a reporter at StartupSmart.

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