Infinity, a neo-banking startup focused on micro, small, and medium enterprises (MSMEs), has announced the successful raise of $1.9 million in a pre-seed funding round. The round saw participation from prominent institutional investors, including Y Combinator, Liquid 2 Ventures, Script Capital, and notable angel investors.
Founders' Vision Rooted in Personal Experience
Founded by siblings Sourav and Sidharth Choraria, Infinity aims to transform cross-border transactions for Indian MSMEs. The inspiration for the venture stems from their father's business in Kolkata, which involves importing materials from China and exporting finished products to markets such as the U.S., Middle East, and Bangladesh. Observing the challenges associated with traditional international payments, the brothers identified a significant opportunity for improvement.
Addressing Inefficiencies in Traditional Payment Systems
Traditional international payments are often routed through the SWIFT network, leading to inefficiencies. Sidharth noted that traditional international payments—often routed through the SWIFT network—are plagued by inefficiencies. Sourav explained, "Imagine SWIFT as a series of connecting flights for your money. When you receive a payment from a U.S. client, it doesn’t come directly to your bank. Instead, the money travels from your client’s bank in Maryland to a bank in Germany, then to one in London, and finally arrives at your bank in India. Each stop adds a fee, and if one of the banks has a holiday or delay, your payment could be held up by a couple of days." For every dollar moved from the U.S. to India, businesses can lose as much as 3-5% in fees and delays caused by the multi-hop SWIFT network.
Innovative Solutions for Cost-Effective Transactions
To counter these challenges, Infinity has partnered with major fintech players to establish custom rails that bypass the traditional network. "Instead of going the SWIFT route, we allow our customers to receive money from direct rails—from our U.S. payment partner to our Indian banking partner," Sidharth said. This approach enables faster, same-day settlements, transparent real-time foreign exchange rates, and fees that are up to 70% lower than traditional banking methods.
Future Plans and Expansion
With the newly secured funding, Infinity plans to expand its product offerings and team, establish partnerships with service providers, and acquire new licenses from regulators. The platform is designed to cater to a wide range of businesses, from SaaS startups managing payouts to companies sending vendor payments. Currently, over 250 exporters are utilizing Infinity's services. The company is also exploring additional features, including investment solutions for idle cash, allowing customers to invest in money market funds and earn returns that often surpass traditional fixed deposits.
Our Opinion on the News
Infinity's innovative approach to streamlining cross-border payments addresses a critical pain point for MSMEs engaged in international trade. By reducing transaction costs and improving efficiency, the platform has the potential to significantly enhance the competitiveness of Indian businesses in the global market. The successful funding round underscores investor confidence in Infinity's vision and the growing demand for more efficient financial solutions in the MSME sector.