How S’pore-based Nium overcame COVID struggles to be unicorn | Bros Tech

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Final 12 months, the Singapore-based fintech firm turned Southeast Asia’s first business-to-business (B2B) funds unicorn.

As a part of a panel dialogue eventually week’s annual Tech in Asia convention, Pratik Gandhi, co-founder and COO of Nium, in addition to Genping Liu, enterprise accomplice at Vertex Ventures Southeast Asia and India, acquired collectively to speak concerning the firm’s journey, particularly through the onset of the pandemic.

In addition they highlighted the necessity for a superb relationship between the founders of a startup and its traders, which is important for the expansion of the corporate.

Canceled funding, pay cuts throughout COVID

Pratik Gandhi, Nium Co-Founder and COO / Picture Credit score: Vulcan Put up Screenshot

Sharing concerning the early days of the corporate, Pratik mentioned that Nium had began out as a really completely different firm. It was known as Instarem, which affords digital cross-border cash transfers to people and companies, though it’s now a part of Nium.

Inside a number of months of beginning the corporate, they’d a really attention-grabbing alternative to have a B2B cost service in a selected nation. They’d no concept how one can run that nation, or in the event that they wanted licenses or the rest. They only went for it and now, they’re about “90-odd % B2B.”

Then when COVID-19 hit, it posed a really attention-grabbing problem for a lot of firms, together with fintech firms.

It was additionally a good time to turn out to be a unicorn. In the beginning of the pandemic, within the first quarter of 2020, there have been round 25 fintech unicorns, minted quarterly globally. At concerning the peak of 2021, that quantity turned 150. And now, I feel we’re again at about 25.

– Pratik Gandhi, Co-Founder and COO of Nium

He described it as climbing a “mountain” and corporations at the moment are again the place they began. It was an amazing second, however this was not the best way COVID began for Nium.

In truth, when COVID hit, Nium had simply participated in a reasonably large funding spherical, which sadly collapsed because of the pandemic.

“We have been working out of funds, so we have been in a little bit of a panic. And naturally we did not understand how COVID would have an effect on our enterprise,” Pratik mentioned.

They thought that many firms can be in an analogous state of affairs and have been decided to outlast everybody else within the business. His precedence is to extend his observe, which meant reducing bills to “scale back the hearth.”

They juggled between shedding some folks and imposing a uniform pay minimize on all workers.

They ultimately settled on the latter as a result of they felt it wasn’t honest to fireside their workers, and made everybody take a 30 % pay minimize as an alternative. For CEO Prajit, he “just about paved the best way” and voluntarily accepted a 50 % pay minimize.

Issues ultimately took a flip

Prajit Gandhi of Nium and Genping Liu of Vertex Ventures
Prajit Gandhi of Nium and Genping Liu of Vertex Ventures / Picture Credit score: Vulcan Put up Screenshot

The founders have been clearly pressured concerning the state of affairs and Genping, their investor, whom Prajit affectionately calls his “different co-founder” for his vital contribution to the corporate’s development, known as him a day.

He requested how a lot they wanted to final a 12 months or two, and Prajit did some calculations on the again of the envelope and offered him with a determine. Inside a day or two, Genping gave him the funding, which served as a “big vote of confidence.”

With this new infusion of funds, the founders have been assured that Nium would have the ability to keep afloat amid the pandemic. In truth, they later realized that the pandemic was “typically good” for fintech firms.

The opposite massive factor that occurred throughout COVID is that they determined to go for 2 very massive acquisitions final 12 months: one was UK-based B2B journey cost firm Ixaris, and one other was Wirecard’s overseas trade unit in India.

Explaining the motion behind these acquisitions, Prajit admitted that the journey panorama was in truth unhealthy because of international border lockdowns.

“Journey was a really soiled phrase on the time. They’d unfavorable income as a result of they have been returning extra, when it comes to refunds, to prospects. So it was a giant bounce for us: we hardly had funds within the financial institution, however we’re good to accumulate one other firm. That was the type of confidence we had in ourselves.”

Moreover, he described these acquisitions as a “full theft” as a result of these two firms at the moment are the “largest moneymakers” for Nium.

However why did the founders spend a lot cash on acquisitions at a time when so many different firms have been going out of enterprise?

We simply needed to be opportunistic. We needed to pay one million kilos up entrance for an organization, and after giving that cash away, we had a few million left within the financial institution. It was a tough resolution, however we actually believed in that firm and we additionally believed in ourselves.

– Pratik Gandhi, Co-Founder and COO of Nium

Obtain the coveted ‘unicorn’ standing

Final 12 months, Nium additionally raised greater than $200 million in its Sequence D funding spherical, wherein its valuation exceeded $1 billion.

The spherical was led by Riverwood Capital, and taking part traders embrace Temasek, Visa, Vertex Ventures, Atinum Capital, Beacon Enterprise Capital and Rocket Capital, in addition to a gaggle of angel traders.

We have been all the time very certain that we are going to be nice sooner or later. It actually helped that everybody appears to assume the COVID tailwinds will final eternally for many companies. In our case, sure, however in lots of different instances, they actually have not lasted. So we began getting quite a lot of consideration from traders and we picked the one which gave us the correct valuation.

– Pratik Gandhi, Co-Founder and COO of Nium

However again in 2016, when Pratik first joined Nium, ‘unicorn’, known as an organization valued at greater than a billion {dollars}, was not a typical time period.

He first got here throughout that time period when CEO Prajit was speaking to him about his Worker Inventory Possession Plan (ESOP). “I used to be speaking when it comes to what occurs to the ‘x’ share if the corporate turns into a unicorn.”

He additionally remembered the time Genping had a dialog with them over drinks. They have been discussing how powerful the funding panorama is, and on the time, Nium was already valued at a few hundred million.

Prajit had drunkenly mentioned they have been going to be a unicorn in a 12 months, so “the outfits have been all the time excessive,” Pratik mentioned.

“[Being a] unicorn modified the best way the world noticed us, though we’re the identical firm. Now, folks needed to hitch us. Beforehand, we used to maintain asking folks from massive firms to hitch us, however they would not. After we acquired the ‘unicorn’ label, all of the sudden every part modified.”

At present, Nium has doubled in measurement and from its preliminary group of 500 workers, it now has 1,000 workers.

Supporting startups in instances of disaster

Prajit Gandhi of Nium and Genping Liu of Vertex Ventures
Picture Credit score: Vulcan Put up Screenshot

Within the period of the pandemic, the position of enterprise capitals (VCs) has turn out to be extra pronounced when it comes to supporting startups, and it’s evident on this state of affairs between Nium and Vertex Ventures.

Genping vividly remembers his assembly at Nium’s workplace through the early days of COVID. He was pushing them to scale back the burn by eradicating crew members, however finally let the administration crew “make the onerous selections.”

The identical factor occurred when it got here to acquisitions. Genping questioned his resolution to accumulate as a result of Nium has not but closed its funding spherical at the moment. If it does not shut, they most likely have to get present traders on board.

As traders, we all know the position we’ve to play. We have now the expertise and supply recommendation accordingly, however on the finish of the day, the choice is made by the founders – they’re those working the enterprise. All we are able to do is do our greatest to offer them with the data and data to realize the end result they need.

– Genping Liu, Enterprise Accomplice at Vertex Ventures Southeast Asia and India

He additionally shared Vertex’s involvement within the early days of Nium. He had led Nium’s Sequence A funding spherical when it was very a lot a customer-to-customer (C2C) remittance firm.

“We have now the imaginative and prescient to go massive, however we aren’t fairly certain if C2C will improve. I keep in mind after I was writing the funding memorandum, I used to be intrigued by the sheer measurement of the cross-border market and rising globalization. However I additionally had quite a lot of issues concerning the C2C enterprise, as did everybody else on the crew, and I do know everybody feels prefer it’s flawed to be within the background of the sport,” Genping mentioned.

“In truth, a few of these issues have been realized within the subsequent few years. A number of the potential that we could not discover at first, however thought there was a risk, turned out to be a lot higher sooner or later. So yeah, I will simply say that everybody ought to have a want and make it clear that it’s important to be able to adapt alongside the best way to be sure to can obtain that imaginative and prescient assertion.”

However how obligatory is it to have massive visions from the beginning?

For each the founder and the investor, a imaginative and prescient is a imaginative and prescient. There should be a imaginative and prescient to encourage everybody to construct collectively for the long run, and it should be large enough. Whether or not it is a imaginative and prescient of constructing a multi-billion greenback firm or a NASDAQ-listed firm, everybody is aware of the journey will likely be tough, nevertheless it’s vital to have a imaginative and prescient to maintain everybody on observe.

– Genping Liu, Enterprise Accomplice at Vertex Ventures Southeast Asia and India

Startup Suggestions

Sharing recommendation with early-stage founders who’re attempting to lift funds, minimize prices or go down the trail of profitability, Pratik mentioned it is vital to assume massive.

“You can begin with a sure imaginative and prescient and a sure enterprise mannequin, however you do not essentially have to stay to it as a result of concepts have this tendency to remodel. And that’s what occurred in our case: we began as one thing else and now we’re a totally completely different firm.”

“You additionally need to be opportunistic and take alternatives whenever you see them. Do not allow them to go, there’s sure to be some threat, however take these calculated dangers.”

For instance, the businesses they acquired have been really depressed on the peak of COVID, however have since moved up the curve.

“To that extent, I feel we’re nicely served by the technique that we have laid out early on and I feel we’ll keep it up,” Pratik mentioned.

Individually, Genping additionally emphasised the necessity for founders to “keep aligned with traders.”

An investor ought to be somebody with whom you possibly can share your mission, past the small print of economic manufacturing. An investor must also be somebody you possibly can belief and work with you thru powerful instances, like throughout COVID.

Within the case of Nium, Vertex Ventures has proven them the which means of solidarity throughout these tough instances.

Featured Picture Credit score: Vulcan Put up Screenshot


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How S’pore-based Nium overcame COVID struggles to be unicorn