Instapay Technologies raised 13 million ringgit (US$3 million) in its series A2 funding round.

This funding round was led by US-based family offices, with participation from ACA Investments Pte Ltd, a Singapore-based Japanese investment firm.

The funds will support Instapay’s working capital needs and accelerate growth in its remittance business.

The company also plans to expand its B2B remittance services through its Glyd Corporate Expense Management Platform.

ACA Investment, an existing investor, noted Instapay’s profitability and sees further growth potential in payroll and cross-border payments.

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🔗 Source: Instapay Technologies

🧠 Food for thought

1️⃣ Riding the massive remittance market growth wave

Instapay’s $3 million funding comes at a strategic time in the global remittance market, which is projected to grow from $782.54 billion in 2024 to $832.57 billion in 2025, representing a 6.4% annual growth rate 1.

The digital remittance segment specifically, where Instapay operates, is experiencing even faster growth, expected to expand from approximately $29 billion in 2025 to over $100 billion by 2034, with a CAGR of 15.1% 2.

This growth is primarily driven by increasing global migration and labor mobility patterns, with remittances accounting for over 20% of GDP in several developing nations, highlighting their critical economic importance 3.

Instapay’s focus on foreign workers’ payroll and remittance positions them directly in this high-growth market, explaining their reported 10X topline growth over three years.

By securing additional capital while already being profitable, Instapay is following a capital-efficient growth model that differs from many fintech startups that prioritize growth over profitability.

2️⃣ Digital transformation reshaping remittance economics

The remittance industry is undergoing a significant shift from traditional to digital channels, with data showing that while 56% of transfers still originate from physical agent locations, digital channels now account for 43% of transactions 4.

Instapay’s e-wallet system (with its RM5,000 limit) and prepaid card offerings position them at the intersection of digital payments and remittance services, allowing them to capture multiple revenue streams 56.

The expansion into B2B remittance through their Glyd Corporate Expense Management Platform represents a strategic diversification, targeting the corporate segment where transaction values are typically higher and relationships more stable.

Market consolidation is becoming a defining trend, with approximately twenty companies expected to handle 90% of the U.S. outbound remittance market by 2025 7. This creates pressure for smaller players like Instapay to secure their market position.

The economics of remittances are also evolving, with competitive pressures pushing the average cost of sending money down to around 3.67% in some corridors 7, making operational efficiency and scale increasingly important for profitability.

3️⃣ Regulatory compliance as competitive advantage

Instapay’s terms and conditions highlight their compliance with Malaysia’s Anti-Money Laundering and Anti-Terrorism Financing laws, including robust KYC processes and transaction monitoring 5, reflecting the increasing importance of regulatory compliance in the remittance industry.

Regulatory challenges, including evolving compliance requirements and potential taxes on remittances, are recognized as significant hurdles that could shift transactions to informal channels 7, giving compliant operators like Instapay a potential advantage.

The company’s emphasis on having “all licenses in place” (mentioned by ACA partner Hajime Adachi) suggests they’ve invested significantly in regulatory infrastructure, which creates barriers to entry for potential competitors.

Malaysia’s position within the fast-growing Asia-Pacific remittance market provides Instapay with a strategic regional advantage, as this region is projected to be the fastest-growing for remittance services 1.

Instapay’s continued backing from Japanese investment firm ACA Investments demonstrates cross-border confidence in their regulatory approach and business model, particularly significant given the complex compliance landscape in cross-border financial services.

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