Toast raises seed funding to help migrant workers in Singapore send money back home

Singapore’s Lucky Plaza shopping center.

Singapore-based online remittance platform Toast has raised a S$1.2 million (US$850,000) seed round, the company announced today. The oversubscribed round was led by Singapore-based investment firm Aetius Capital, and joined by international investor ACE & Company, which has previously invested in financial comparison site CompareAsia and online peer-to-peer payments startup Transferwise. New York-based investment company One Zero Capital also participated in the round.

Toast is the first out of accelerator Startupbootcamp Fintech Singapore’s inaugural cohort of startups to raise funding. Most of the investors that got in this round found out about the startup through its time in the accelerator, which founder and CEO Aaron Siwoku says he is grateful for. “[Startupbootcamp] gave us a tremendous amount of visibility,” he says. “It’s designed to plug you into a network, to do things faster than you’d be able to on your own.”

A better way

Toast has created an online money remittance platform for migrant workers in Singapore who want to send money back to their families in the Philippines (other countries such as Indonesia, Bangladesh, Myanmar, and so on are in the startup’s future plans). It has developed a mobile app where the user can create an account, verify their identity, load it with funds, and then remit the money to their chosen destination in minutes, for a fixed fee of S$6 (US$4) per transaction.

See: Startupbootcamp announces top 10 FinTech startups to join its Singapore programThe process is supposed to save time and money for workers who queue up every month in places like the Lucky Plaza shopping center, a Filipino hub in Singapore, to send money using good old money transfer operators (MTOs). The sight of people queuing in the Singapore heat was what inspired the team to come up with a better way, Aaron tells Tech in Asia.

“The reason they are queuing up is because these MTOs are still running a very old-fashioned business model,” he explains. “People queue up, they hand cash over a counter, the cash has to be counted, their ID has to be verified each time they do a transaction, and this creates queues.” So the startup looked for a way to digitize the process using a mobile app.

Toast founder and CEO, Aaaron Siwoku.

While there are companies in Singapore trying to solve the same problem, like cashless payments terminal manufacturer Numoni, Toast’s approach works almost entirely through the mobile app.

95 percent of those workers have some type of smartphone, Aaron says. And 100 percent of them have another very useful thing: an EZ link travel card or a NETS Flashpay card – contactless cards which are topped up with funds and used for various payments across Singapore, including the mass transit system and certain retailers.

Traditional money transfer facilities are inefficient compared to today’s technology. “We live in the age of instant messaging,” Aaron says. “I can have a conversation with my mother in real time via my smartphone, yet if I send money it takes three to five days. I know more about a package I send to my mom with FedEx, than I do about money I send to her. I think this is a problem.”

Do it yourself

The Toast app will be available for Android phones next month.

After creating an account, the user can register by taking a picture of their ID card. The software will enter their details into the system automatically. Every time the user needs to do a transaction, the app will prompt them to take a selfie, which it compares against the photo ID it already has for verification.

Breaking the chain

Go for launch