Instimatch's platform to match money-market borrowers and lenders boomed in the pandemic. CEO Daniel Sandmeier tells finews.asia where the fintech is looking to expand next.
Daniel Sandmeier, Instimatch’s digital platform should be a corona «winner». What’s trading on the platform been like?
We've been surprised by the velocity and the magnitude that is shifting in cash deposits and cash markets. In April alone, we traded nearly 5 billion Swiss francs [$5.2 billion] over the platform, which is almost five times as much as in January.
Where are you winning that volume?
In these crazy times, treasurers had very erratic, dramatic need for liquidity, or to dispose of liquidity. The platform gives them transparency via a price-finding mechanism.
«Treasurers are working from home too»
This combined with the treasurer probably working from home benefited the platform usage. April volume was very heavily in Swiss francs, and mostly with Swiss clients.
You recently launched in the Middle East and you also opened a U.K. office. How do you plan to extend the recent Swiss momentum into the newer markets?
The Middle East is one of our focus areas, and another is Eastern Europe where we're looking to start with Poland. The next logical step is to move further to Asia.
How quickly do you expect that to happen?
I would love to expand to Asia as soon as possible! It’s a matter of not spreading ourselves too thin. I think it will take the next step in growth and another funding round for us to be able to grow into yet another region.
What are your other avenues for growth?
Strategic partnerships. Our growth momentum and adoption of the platform make it easier for us to enter into partnerships with other providers with similar, complementary services.
What kind of examples?
We're looking into partnering with a foreign exchange provider, and with a treasury management/payment systems provider.
«After funding is always before the next round»
There are a few things in the pipeline which unfortunately I cannot go into detail on but will allow us to multiply and grow our client base much faster.
You mentioned funding – how much do you need to raise, and by when?
Like any other start-up, after the funding round is always before the next one. We keep all our options open.
A lot of the traditional sources of financing – like venture capital – screeched to a halt due to the pandemic.
Yes, discussions have come to a standstill, but they're slowly picking up again. I'm very optimistic that with the gains in momentum and traction that we have, we'll be able to attract new investors
What are Instimatch’s targets for market share and break-even?
Any institution that trades cash or needs cash, either deposits cash short term or needs a short term loan and goes through a bank or other counterparty is potentially a customer of ours.
«If we tap single-digits, we're sizable already»
Thanks to the scalability, even if we only tap into a smallish single-digit percentage fraction of the money market, we're a really sizable platform.
Speaking of scalability, how has your technology held up under the glut of volume in April?
We didn't have any outages or platform downtime.
What has the crisis taught Instimatch?
Here in Switzerland, the market was all over the place. We heard from clients that it was very difficult for some to assess, say, where is three-month Swiss franc paper right now with a A-rated counterparty – those rates shifted so dramatically.
«We won't be profitable for awhile»
We introduced a new function which allows users to go fishing for a price on that three-month Swiss franc deal for example, without giving away too much already.
What are your hiring plans?
The heightened use of the platform doesn't necessarily demand more people on the ground: as a digital marketplace, you can cope with increased volume with marginally more staff.
When do you expect Instimatch to break even?
Not for another while. We changed to a «freemium» pricing model recently and are currently working on a subscription model for value-added services. That will drive revenues in the future, but for now, the mission is to make Instimatch to go-to place to trade cash. We want to be what LinkedIn is for looking up people professionally.
Daniel Sandmeier was named CEO of Instimatch in 2018. Founded by Hugh MacMillen in 2017, the Zurich-based fintech firm has raised money from investors including Vicenda, a Swiss debt boutique. Sandmeier spent nearly 13 years at Credit Suisse, mainly in structured products, and presided the Swiss Structured Products Association from 201o until 2014. The Swiss-born capital markets veteran also co-authored a reference book on structured products in Switzerland. He worked for UBS for nine years as a senior exotic derivatives trader and structurer after starting his career as an equity derivatives trader at Merrill Lynch
