Singapore-based fin-tech startup Toast is raising a US$750,000 seed round, with half the funds already committed, e27 has learned.
The Startupbootcamp (Fintech Singapore) incubated startup founded by British entrepreneur Aaron Siwoku, which just relaunched following a rebranding from Cryptosigma last week, has already received S$24,500 (US$18,000) in return for an eight per cent equity stake from the accelerator.
Toast wants to make sending money “take less time than it takes to make a piece of toast”, and also wants it to be used as a verb: “Toast me!” Its main target market is Singapore’s large population of migrant workers who regularly send money back home to countries like the Philippines in the form of remittances.
Like most new fin-tech startups offering remittance services in the region — including competitors such as Hong Kong’s Bitspark, the Philippines’ coins.ph, and Singapore’s CoinPip — the underlying technology powering it is the Blockchain.
“We don’t think that migrant workers need or want to know about Blockchain,” Siwoku told e27 in an interview. “They just want to know that it’s a reliable solution, the pipes are clear and that the money they send will get there cheaper, faster and more efficiently.”
“There’s plenty of room for everybody who brings a good product in,” he added, addressing concerns of an increasingly saturated market for such services. “A lot of people think it’s winner takes all, and it’s not.”
One recent study found that Southeast Asia has a large inbound remittance market that was worth US$56.8 billion in 2014.
Laying the groundwork
The startup is currently in the process of applying for remittance licences in both Hong Kong and Singapore. Non-Toast users in the Philippines that want to collect funds sent from an origination market like Singapore will have the option of more than 7,000 cash-out locations to choose from.
On the sender side, Toast’s e-wallet can be topped up via NFC in the mobile app from an EZ-Link transport card in Singapore, or via a scratch card. Meanwhile, a partnership with MasterCard will allow Toast to issue debit cards that can be used to spend funds in the e-wallet.
Siwoku also revealed that he is in the early stages of partnership discussions with a large multinational investment banking firm regarding the possibility of a joint venture. The goal would be for Toast to serve the remittance needs of migrant workers in France, sending money from Europe to Africa.
In a quirky tale, Siwoku said he was inspired for the rebrand after seeing a Toast Box advert in an Uber ride to a meeting with Visa in Singapore.
Unlike some other players in the space who choose to be based out of other strategic locations in the region, Toast is opting for Singapore for some pretty clear reasons.
“I think Singapore is a fantastic place to do business on a level playing field, whether you’re a foreigner or a local,” Siwoku said. “It’s one of the financial capitals of the world and certainly one of the biggest in Asia. On top of that, [a large percentage] of Singapore is migrant workers, so what better place to launch an app for [that segment]. And the sun shines every day.”
Looking towards a US$60 million Series A
Ultimately, Toast has global plans. Siwoku is quite clear that its longer-term vision is to head towards a US$60 million Series A round.
“The holy grail for migrant workers is not having to queue up on their only day off to send money home to loved ones, and for it to be cheap,” he said. “Sending money via Toast they can achieve both. Therefore, the milestones for our seed investment strategy revolves around building significant traction in Singapore, refining the product experience, reducing the friction of the sign-up and money transfer process for our users.”
“All of the above is being executed with the intention of proving the significance of our business strategy and model in order to move towards a US$60 million Series A, that will allow us to expand in the region and provide a simple, cash in, cash out real-time money transfer solution for overseas foreign workers,” he concluded.
The service is due to officially launch in Q4 this year. Watch this space.