Bogota-based payments infrastructure startup Minka has secured $24 million in a funding round co-led by Tiger Global Management and Kaszek.
In an interview, CEO and co-founder Domagoj Rozic described Minka as “a seamless payment network built from the ground up.” The network was designed to connect separate legacy systems through blockchain concepts and APIs “to simplify the movement of complex money flows.”
In other words, Minka is an open network that aims to allow organizations such as banks and clearinghouses to “publish” and move money in real time by exposing their “closed, outdated core systems” to the web.
“This in turn enables them to collect, send or exchange money in real time without the need for reconciliation and with almost no cost,” Rozic told TechCrunch.
In its home country of Colombia, the startup has already had an impact. It partnered with ACH Colombia to work on The Transfiya project, which includes direct read and write API access to 80% of the accounts in the country. This makes it the largest open banking project in the region, according to Rozic.
“We aim to connect the world’s balances through the web using shared, connected ledgers,” he said. “The project in Colombia has proven this is possible and has become one of the fastest-growing real-time payments networks in the region, enabling previously slow money to move instantly and with minimal cost.”
Currently, nearly two million people use the project to send money using only a phone number. Minka has 20 financial institutions and fintechs directly connected to its platform, with another 20 in the process of integration, according to Rozic.
The startup is measuring the number of transactions, connected institutions and active users on our platform. Transactions and users have been increasing 20% month over month throughout 2022, which has led to year-over-year growth of 250%, according to Rozic.
“Since our model is a transactional SaaS, the revenues have also been increasing,” he told TechCrunch.
The startup also plans to use its new capital to continue to “modernize” the infrastructure of clearinghouses and central banks. It plans to grow the network by building out a full self-service tool for publishing and moving money to organizations that will support one-click purchases, payouts and collections.
“Our clients are primarily clearinghouses and financial institutions,” Rozic said. “With the raise of new capital, however, we will also offer a self-service SaaS to fintechs soon.”
“We have improved the way people interact with money in Colombia and are now building an open network to scale the benefits around the world,” he added.
The name Minka comes from an old Quechua word that stands for collaborative work for the good of the community.
Rozic said he was inspired to start Minka when he moved to Colombia five years ago.
“I realized I could send a photo of my daughter to her grandparents in Croatia for free, and using only a phone number,” he told TechCrunch. “But to send 5,000 pesos to a neighbor next door, I had to wait for two days and I would end up owing money to the bank.”
Rozic teamed up with Paola Sanchez and Tomislav Biscan to build a new payments network for cash-based economies in order to enable money to flow as easily as information does.
Image Credits: Minka
That wasn’t the original plan. Minka actually started its life in 2018 purely as an R&D company focused on building a new payments protocol. In that process, it came in contact with the central bank and the local ACH, and then won an RFP to automate Colombia’s payments infrastructure.
It plans to take its work to help Spanish-speaking countries in Latin America also modernize their payments infrastructure, with immediate plans to expand to the Dominican Republic, Bolivia and Mexico.
The startup was introduced to a client in the Dominican Republic by Mastercard, with whom Minka is partnered, along with Google. Notably, Mastercard is also an investor in the company.
“We’re entering new markets through a referral program with these partnerships to help us move the connectivity to our network,” Rozic told TechCrunch. “These companies act as an extended sales team for Minka and they get to market faster with real-time payments. Payments infrastructure as a service is unusual for LatAm. Our goal is to be powered by Minka, what everyone uses but nobody sees.”
Minka has about 30 employees, with its product and tech team located in Croatia and support and sales staff in Colombia.
Tiger Global Partner Alex Cook said his firm is eager to support Minka in its mission “to build the open infrastructure for money.”
“The successful rollout of Transfiya in Colombia reflects the strength of the Minka team, and we expect they will continue to accelerate the adoption of real-time payments globally,” he said in a statement.
Previous backers including FinTech Collective — which led its seed round in 2021 — also participated in the financing. To date, the company has raised a total of $27.5 million.