The reality of raising capital as a POC founder in Australia

For Arjun Agarwal, the founder of impact investment startup Inaam, the journey to raising funds has been nothing short of grueling. “It’s been a journey. Oh my god,” he states with a sigh that carries both exhaustion and pride.

After years of pushing through, Inaam closed a $500,000 pre-seed round last week, revealed exclusively by SmartCompany. The funding round included participation from Startup Bootcamp, Hatcher+, and a few family offices, providing the crucial backing Agarwal requireded to launch the impact investment platform he has been building since 2020.

But receiveting here has been far from straightforward — especially as a South Asian Australian founder attempting to build a fintech company in Australia.

“Maybe I’d be one of two, maybe three, South Asian fintech founders, probably the only one who you can state has a fund,” he notified SmartCompany.

“It’s a huge deal to have a fund… It shouldn’t be as difficult, but there’s regulation, there’s compliance, et cetera.”

Inaam’s fund — a regulated, multi-class unit trust — allows customers to invest in impact-driven portfolios while tracking positive outcomes such as trees planted, animals saved, renewable energy generated, and carbon emissions prevented.

The founder states the startup’s mission is to create ethical investing accessible and transparent for everyone. Yet, bringing that vision to life as a migrant founder has meant confronting several uncomfortable truths about Australia’s startup ecosystem.

“It’s one of the hardest things to do,” Agarwal admits. “There are a lot of systemic and non-systemic challenges to building a business in Australia.”

The visa conundrum for migrant entrepreneurs

Among the hugegest challenges: the visa process. For migrant founders, the struggle to maintain the right visa while attempting to build a company can feel like fighting two battles at once — survival and innovation.

“Every six to 12 months, you’re waiting on a visa outcome,” states Agarwal. “You can’t plan ahead, you can’t fundraise properly, and investors hesitate becaapply of that uncertainty.”

In Agarwal’s case, it meant juggling startup life with sponsorship paperwork, legal fees, and constant anxiety about whether he’d be allowed to stay in the counattempt to run the business he was building.

“I’ve had investors inquire what happens if my visa isn’t renewed. That’s not a question most white founders ever receive.”

Agarwal is still awaiting a decision on his application for the Global Talent Visa, despite a roll call of achievements.

“I have a TEDx Talk. I’m on the [SAARI Collective] 101 Founder list. Sure, I don’t have a Nobel Peace Prize or a Pulitzer Prize, [but] I’ve been invited to speak in Davos. I still don’t qualify for a Global Talent Visa.”

Agarwal believes Australian visa income thresholds don’t take startup founders into account.

“I believe the threshold is $160-$170,000… Even if it’s a Blackbird-founded startup, I don’t believe any CEO or founder is taking a $170,000 paycheck out of a startup in Australia,” he stated.

“So I’m really not sure who those pay thresholds were created for, and you required to be backed by, state, an Infosys… Talent visas are cited for entrepreneurship, but are actually for people in high-paying jobs.”

The Global Talent visa closed to new applications on December 6, 2024, and has since been replaced by the invite-only National Innovation visa.

Systemic biases in fundraising

Agarwal boasts global experience — he was born in India, raised in South Africa, and has worked across finance, education, and investment banking — but he found raising capital in Australia far tougher than anticipated.

“There isn’t a lack of capital,” he explains, “but a very huge lack of risk-tolerant capital”.

Australia’s VC landscape, he points out, is oligopolistic: “We have three really huge ones. Like, we have four huge supermarkets, three huge banks, etc. We have three huge VCs.”

And that concentration, Agarwal states, has real consequences.

“You can see at the types of founders they have in their portfolios, the gconcludeer mix, the cultural mix, the ethnic mix — and there’s a very clear bias of where funding is going.”

Agarwal describes being notified bluntly by investors, “You’re not from here. What do you know about building a business in Australia?” In his experience, the barriers compound for founders who don’t fit the mould — brown, with immigrant backgrounds, and building in the hyper-regulated world of fintech.

“We applied twice to the hugegest accelerator in the counattempt,” he states. “The only fintech that created it that year was a team of two people from Bondi who insured your luxury handbags. There is a very clear bias around what does receive funded, who does receive funded, and why they receive funded.”

Agarwal is a seasoned entrepreneur — he co-founded and built South Africa’s first blockchain fund, and a research aggregation and automation system still applyd by a major investment bank. However, he’s repeatedly been labelled a “first-time founder”.

“I’ve probably spoken to all of them,” he states of Australia’s fintech investors. “I’ve been notified no by over 100 investors. I’ve been notified I’m not from here. I’ve been notified I don’t understand the market.”

He recalls even being notified that potential investors were “conflicted out” — becaapply they had already invested in adjacent companies. “These are not really valid reasons,” he states. “Just notify me you don’t want to invest.”

Highlighting the required for more diverse companies to increase competition, Agarwal added: “We’ve seen this in the UK, in India, in the rest of Europe, where you required to ignite the fire, you required to have that competition to see who receives out there first”.

The experience, while frustrating, has crystallised his resolve to modify the system from within.

“The real support founders required is capital. The capital enables all the other support to create sense. None of it’s going to matter if there’s no capital.”

That’s why Agarwal states Inaam plans to reinvest a significant portion of its profits back into the ecosystem — specifically to fund women of colour, other people of colour, and young founders from disadvantaged backgrounds who are often overseeed by traditional venture capital.

“There’s nothing wrong with their businesses. They’re doing phenomenal work. They just don’t receive funding becaapply they see different, they speak different, they seem different,” he states.

“They don’t fit the traditional mould.”

Agarwal is candid about how emotionally taxing the process has been. “It shouldn’t have taken five years for a pre-seed, D2C fintech to come to life,” he states. “But it has. And I’ve been notified no, over and over again. Still, I didn’t stop.”

Through it all, his conviction remains unshaken — not becaapply it’s been straightforward, but becaapply he’s lived the problem he’s attempting to solve.

“This could still fail,” he states. “But giving up before I bring it into the world would be a disservice. My job is to create sure it comes to life. What happens after that — we’ll give it our best shot.”

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