Midas, a fintech startup based in Turkey, has announced that it raised $45 million in a recent funding round led by Portage of Canada. The company focuses on the retail investor market in Turkey and offers a platform for investing in both U.S. and Turkish equities. Midas differentiates itself by charging lower transaction and commission fees compared to other brokers in the country.
With over 2 million users, Midas has experienced rapid growth in a market where capital market penetration rates have traditionally been low. Egem Eraslan, the CEO and founder of Midas, attributes this low penetration to a lack of investment infrastructure. While mobile banking has been widely adopted in Turkey, there has been a gap in equities products. Midas aimed to address this gap by building its own infrastructure and providing an intuitive user experience.
Eraslan highlights the capital-efficient approach that Midas took in its early stages. By building the necessary infrastructure with less than $500,000, the startup was able to gain traction, raise capital, and break through the investment deadlock. Eraslan claims that Midas is possibly the only new broker in the world that has launched self-clearing, self-custody, and self-execution functionalities.
Midas draws comparisons to Robinhood, a popular U.S.-based investment platform. However, Midas had to take a different approach due to the unique market conditions in Turkey. The company had to develop multiple products with its own self-clearing and custody capabilities, which were not necessary for Robinhood.
With the new funding, Midas plans to expand its product offerings to include cryptocurrency trading, mutual funds, and savings accounts. Additionally, the company aims to expand its operations beyond Turkey and target countries in the Middle East and North Africa (MENA) region.
Several prominent investors participated in Midas’ funding round, including International Finance Corporation, Spark Capital, Earlybird Digital East Fund, and Revo Capital. The $45 million funding round is one of the largest for a Turkish fintech in recent years, second only to Param, an embedded finance startup that raised $50 million in 2022.
Cem Sertoglu, managing partner of Earlybird Digital East Fund, praised Midas for capturing the growing demand in the Turkish investment market and executing its strategy flawlessly. While winning the domestic market in Turkey is already considered a success, Midas has ambitions to expand further.
Paul Desmarais III, co-founder of Portage and CEO and chairman of Sagard, recognizes Midas as a leader in transforming Turkey’s financial landscape. He believes that Midas is well-positioned to drive innovation in the region and tap into the potential of early adopters.
In conclusion, Midas’ successful funding round signals the growing interest in fintech startups and the potential for disruption in traditional financial markets. With its focus on providing affordable investment options and educational resources, Midas has positioned itself as a key player in Turkey’s retail investor market. The company’s expansion plans and strategic partnerships demonstrate its commitment to driving innovation and meeting the evolving needs of investors in the MENA region.