TranSwap Co-founder and CEO Benjamin Wong
Singapore-headquartered cross-border remittance company TranSwap is in talks to raise US$5-10 million in a fresh round of funding.
In a recent interview with e27, Co-founder and CEO Benjamin Wong said TranSwap is looking to close the round “quite soon”.
To date, the fintech company has secured US$2.5 million from investors, including Quest Ventures, and an unnamed family office and a few high net-worth individuals.
“We have raised about US$2.5 million to date, and we are going to close another bigger round soon,” he revealed to this publication. “We haven’t announced it yet but it will be quite soon. The amount is about US$5-10 million.”
Started in 2015, TranSwap allows businesses to manage and execute payments globally while reducing FX costs and complexity. It also serves importers and exporters seeking to make payments internationally.
The firm holds money remittance licenses in Singapore, Hong Kong and Indonesia.
Last week, TranSwap announced a plan to launch in May a new offering, called Global Borderless Virtual Account (GBVA), in the US, European Union, the UK, and Indonesia. This new product will enable customers to open virtual bank accounts in these three locations. This will allow businesses to conveniently collect payments, convert foreign currencies, and send cross-border payments to over 180 countries worldwide.
The COVID-19 crisis
According to Wong, although many industries were taken a hit by the spread of COVID-19 globally, fintech is among the very few industries which haven’t seen much impact. The sector has, on the other hand, registered a decent growth during the period, owing to a rise in online purchases/e-commerce activities.
Also Read: Quest Ventures makes first close of fund II at US$50M led by Pavilion Capital, QazTech Ventures
He, however, admitted that if this situation lasts for over a year, every industry will come to a standstill, including fintech.
In view of the rapid spread of the epidemic, many businesses have shelved their plans to expand. TranSwap, however, plans to execute its geographic expansion plans.
As part of this, it has already hired one person in Malaysia, with plans to recruit more people in Indonesia and Singapore.
Outside of Asia, the fintech venture is also looking to hire in the UK and Europe.
“We are now accelerating our future plans. We have the resources and licenses to operate in Hong Kong, Singapore and Indonesia. This year, we are going to apply for licences in the UK, Europe, Australia and Malaysia,” he said. “Our vision is to have global licenses in at least 15-20 countries.”
A veteran entrepreneur, who has seen various global crises, including the economic recession of 2008-09, Wong felt that cash flow is always important for startups to tide over unexpected events in life like COVID-19.
“Startups is all about expanding and burning money, so liquidity is very important,” he said. “Venture capital is likely to be short in times of crisis like this. Startups that have already raised funding should go back to their VCs for more capital. They also need to go their customers and employees and support each other,” he warned.
He also warned that post-COVID, the world won’t be the same. “It will change a lot of things. Many startups will not make it because of cashflow. Those who survive the attack of the virus will come out much stronger,” he said.
“Fortunately, the governments of all major countries are trying to help businesses in every possible way. You just need to hang on. Maybe, you don’t have three meals a day but make sure you survive. When it is over and if you get over the crisis, you’ll be much stronger,” he commented.
According to Wong, Asia’s remittance market is highly competitive, with the presence of multiple operators, including TransferWise and InstaReM. However, for TranSwap, its premium products help it stand out from the rest.
“We will be offering many premium products to businesses, mainly SMEs. Besides sending money, these businesses also need e-invoicing if they have operations in overseas countries like the UK and the US, which require them to open a bank account. TranSwap can issue borderless multi-currency accounts to them to collect and pay money, even though they don’t have an entity in these foreign markets,” he explained.
“Businesses also need hedging facility if they deal with currency, receivables, and payments. They also need treasury management. These offerings differentiate us from our competitors,” he continued.
Also Read: TranSwap obtains license to provide cross-border payments services for SMEs in Indonesia
Sharing his perspective on the rush for the new digital banking licences in Singapore and Malaysia, he said the digital banks will help serve markets and sectors, where traditional banks cannot reach.
“I think we can learn from the experience of the UK, where digital banking is getting an uplift. Because of the challenges posed by new digital banks, traditional banks in the UK have become much more competitive and transparent, which is eventually benefitting the consumer.
Besides, challenger banks in the UK are much cheaper — only GBP5 million is needed to start a challenger bank. So, digital banks have a crucial role to play,” he concluded.
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Image Credit: TranSwap
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