Midas, a fintech startup that allows people in Turkey to invest in US and Turkish stocks, says it has raised $45 million in a funding round led by Portage Ventures of Canada.
The startup targets Turkey’s retail investor market and claims to have more than 2 million users. Its pitch is that it charges significantly lower transaction and commission fees for Turkish clients who want to invest in US or Turkish stocks. It also offers financial content, real-time stock market data and news, and company profiles — all to educate what many consider to be somewhat of an emerging market.
“If you came to Turkey three years ago, there were only 1.5 million investors. This is in a country of 80 million”, Egem Eraslan, CEO and founder of Midas, he told TechCrunch. “Capital market penetration rates were very, very low. Mobile banking in Turkey is very good and widespread, but there has been a lack of investment in equity products due to a lack of infrastructure.”
According to Eraslan, Midas managed to change this dynamic by building its own infrastructure and providing a decent user experience. “We were extremely capital efficient. We built much of the initial infrastructure product and licensing for less than $500,000, and that allowed us to launch, gain traction, raise capital, and break that deadlock. We may be the only new broker in the world to start self-clearing, self-curating and self-executing.”
Midas is no different from US-based Robinhood, which has become a giant in the space by providing retail investors with an easy way to invest in the financial markets. But Eraslan explains that his company had taken a different path in Turkey.
“We had to launch many products with our own self-clearing, custody and with the entire value chain. If you’re Robinhood, you don’t need to self-edit or self-clear.”
Midas now plans to use the new funding to launch three new products: cryptocurrency trading, mutual funds and savings accounts. The company has plans to expand beyond Turkey and is targeting countries in the MENA region.
International Finance Corporation, Spark Capital, Earlybird Digital East Fund and Revo Capital also participated in the round. The company last raised $11 million in 2022. Coming within three years of its founding, Midas’ latest fundraise is one of the largest by a Turkish fintech in recent years, well behind embedded finance startup Paramwhich lifted up $50 million in 2022.
Cem Sertoglou, CEO of Earlybird Digital East Fund, one of the startup’s early investors, said: “Having perfectly timed the boom in demand in the Turkish investment market as the first digital native investment platform, Midas is executing flawlessly. Conquering the home market in the world’s 11th largest economy will already be a success for Midas, but its ambitions lie beyond that.”
In a statement, Paul Desmarais III, co-founder of Portage, and CEO and president of Sagard, said: “Midas is riding a wave of transformation in Turkey’s economic landscape. Globally, Portage invests in transformative financial technology and Midas is poised to lead this initiative in an early adopter region.”
