Cross-border payments firm Instarem achieves record growth, eyes IPO in 2022

Cross-border payments company Instarem is recording impressive year-on-year growth, and the firm’s co-founder and CEO Prajit Nanu says he has its enterprise business to thank.

The Singapore-headquartered company began operations in 2015. Last year, Instarem handled US$1 billion to US$1.5 billion in transaction volumes and is on track to achieving US$5 billion this year, Nanu reveals. That’s about a fivefold growth.

Instarem CEO Prajit Nanu / Photo credit: Instarem

To put this in context, London-based Transferwise, a fellow player in the cross-border payments space, processed over £3 billion (US$3.6 billion) in monthly transactions in Q1 2019 and more than £4 billion (US$4.8 billion) a month in Q2. Extrapolating the latter figure, we’re looking at an annualized US$57.6 billion worth of transactions.

According to McKinsey, global cross-border payment revenue for 2017 stood at US$191 billion, indicating that cross-border fintech startups have a large potential market.

Instarem is now present in over 40 countries across Asia, North America and Europe. Its platform allows users to transfer money to more than 55 countries worldwide.

The firm counts Global Founders Capital, Vertex Ventures – the venture capital arm of Temasek Holdings – and Fullerton Financial Holdings among its investors. Since inception, it’s raised US$59.5 million.

A lot of Instarem’s growth comes from B2B partnerships: “Bank businesses give you scale. Once you integrate a bank into a platform, you immediately start to see US$15 million to US$20 million of flows on a monthly basis,” Nanu says. According to him, this grows to US$100 million “fairly rapidly.”

Having integrated with Thailand banking group Kasikornbank in May, Instarem now powers cross-border payments for the bank’s customers. Nanu says the startup will announce similar partnerships in the next two months.

Banks and international money transfer giants like MoneyGram and Western Union have traditionally dominated the space despite having a reputation for their opaque fee structures But fintech startups like Instarem, Transferwise, Singapore-based M-Daq, and London-based WorldRemit are challenging the status quo.

Democratizing money movements

Short for “instant remittance,” Instarem prides itself on transparent pricing and zero-margin foreign exchange (FX) rates. This means that the company quotes customers the interbank FX rate, without adding a margin to it – a standard that banks don’t practise – and instead charges a nominal transaction fee.

The result is more competitive rates, as Instarem’s internal research shows.

Photo credit: Instarem

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