By Sumit Chakraberty for Tech in Asia
Cross-border remittances amounted to a whopping US$575 billion last year – the bulk of it going to developing countries as migrant family members sent money home or companies sent payments to workers abroad.
Singapore-headquartered Instarem is a disruptor in this space, reducing the cost of money transfers due to the “FX spread” that banks impose. (FX spread is the difference between the wholesale inter-bank foreign exchange rate and the rate quoted to you by the bank or international money transfer company.)
We look forward to plugging Instarem into our global ecosystem of fintech and financial service companies.
Instarem has grown rapidly since its launch at the beginning of 2015 in Australia – the first country where it got a licence to make remittances. It then got licences in Singapore, Hong Kong, and Canada. From these countries, it can transfer money to 50 countries currently.
The startup raised a US$5 million series A round led by Vertex Ventures in March last year.
Instarem says the amount of remittances it handles has grown eightfold since that funding. It claims to be processing 150,000 transactions a month, with an average transfer size of US$1,800. The charge ranges from 0.25 percent to 0.5 percent, “instead of the usual fee plus FX spread,” which varies from 1 percent to 5 percent in different markets.
Today Instarem announced a series B round of US$13 million. Silicon Valley and Beijing-based GSR Ventures led this round, with participation from SBI-FMO Fund, Vertex Ventures, Fullerton Financial Holdings, and Global Founders Capital (GFC).
Instarem intends to expand into Europe and the US by the end of this year, says CEO and co-founder Prajit Nanu, who hails from India’s financial capital, Mumbai. It is also building a new payment system that promises to speed up Euro payment transfers “from 24 hours to less than 10 seconds across 34 member countries.”
GSR Ventures, which was the first institutional investor in Chinese unicorns like Didi and Ofo, can help Instarem with its network in China and the US. And the choice of SBI-FMO Fund as an investor serves a similar purpose.
“We look forward to plugging Instarem into our global ecosystem of fintech and financial service companies,” says Suramya Gupta, fund manager at SBI-FMO Fund, set up jointly by Japanese financial services conglomerate SBI Group and the Netherlands development bank FMO.