Indian Fintech bags mature capital in 2018; Indian-founded InstaReM among the trailblazers

Mumbai: It has been a little over two years since demonetisation gave India’s fintech sector the boost it needed to burst into the mainstream. India-specific payment infrastructure innovations such as the Unified Payments Interface (UPI) have won the common man’s trust.

According to data from the National Payments Corporation of India (NPCI), there were Bharat Interface for Money (BHIM) UPI transactions of approximately 913 million in volume and close to INR 1 trillion in value in FY18. Speaks a lot about the acceptance of a new way of making payments.

So, it’s not surprising that fintech – the enabler of the digital payments – has received much mindspace and love from the users, investors and global companies have turned their attention towards India to cash in on the opportunity.

The number of deals in Fintechs, amounting to US$ 100 million or more, also rose to five this year, versus just three in 2017. Insurance aggregator PolicyBazaar raised US$ 238 million from Softbank in June at a valuation of a little more than US$ 1 billion. Singapore-based Temasek, along with PayPal, invested US$ 125 million in payments service provider Pine Labs, also valuing the fintech at over US$ 1 billion. And of course, PayTM raised US$ 300 million from Warren Buffett’s Berkshire Hathaway. Given the size of the market and the pain-points that fintech promises to address, we can expect more – and bigger – deals in the fintech space in the coming years. India’s fintech opportunity is huge, and we’ve probably barely scratched the surface.

Prajit Nanu, India-born co-founder and CEO of Singapore-headquartered InstaReM, says, “The last couple of years, one might say, have witnessed the sector come of age, showing investors a stability and developmental value in terms of financial inclusion while addressing traditional pain-points for the banked people. Perhaps that’s why mature capital has come into the Fintech space this year.”

InstaReM, Southeast Asia’s hottest digital cross-border payments company co-founded by an Indian entrepreneur, Prajit Nanu, announced the first close of its US$ 45 million (INR 322 crore) Series C round, in November 2018. The company has eight offices globally, which are supported from its operations office in India, which is the money transfer service provider’s biggest office globally.

Nanu’s investors are all blue chip- mature capital, again. From Vertex Ventures (the VC arm of Singapore state investor Temasek Holdings), Fullerton Financial Holdings (A subsidiary of Temasek Holdings), Global Founders Capital, GSR Ventures, SBI-FMO Emerging Asia Financial Sector Fund, MDI Ventures (the VC arm of Indonesia’s Telkom) and Beacon Venture Capital (the VC arm of Thailand’s KASIKORNBANK), Nanu has perhaps proved that blistering pace and stability can co-exist in a start-up.

The cross-border remittances market has been dominated by banks and money transfer operators. Traditional ways of transferring money overseas are expensive due to high transfer charges along with hidden fees which are not known to clients. Too much of paperwork and multiple touchpoints increase costs and stretch the time taken for end-to-end transfer. InstaReM gets around this universal problem with a simple, yet creative approach – a peer-to-peer transfer of money. With deep understanding and the dynamics behind cross-border money transfers, InstaReMhas developed a technological solution that uses the Internet as the medium to move money across borders much more efficiently.

Starting operations in Australia-India corridor in 2015, the fintech has since expanded to serve 300+ corridors across four continents. Today, InstaReM has presence across Asia-Pacific, North America and Europe with regulatory licenses/approvals in key markets like India, Singapore, Australia, Hong Kong, United States, Canada, Malaysia and Europe. InstaReM powers local payments to more than 55 countries and reaches to 3.21 billion people across the globe via its 8000+ banking partnerships globally. InstaReM has created a unique payment mesh in Asia, which is being leveraged by financial institutions, SMEs and individuals to make fast low-cost cross-border payments.

There is a growing preference among migrants’ towards digital means to send money to their families back home. Around 90% of cross-border remittances are still effected via traditional methods that entail higher costs due to legacy infrastructure. This is the problem InstaReM is looking to address. According to a recent update from the World Bank, global migrant’s remittances are projected to reach US$ 689 bn in 2018, and India will retain its position as the world's top recipient with its diaspora sending a whopping US$ 80 bn back home. This means a huge opportunity for digital remittance service providers like InstaReM.