- Venture capital interest strong among remittance startups
- Investment could drive costs downward
Pew Research Centre has released new data which reports that migrants from all over the world transferred approximately $574bn to their home countries in 2016. At that time, the cost of international money transfers was on the higher end of the scale, but now a number of companies have sprung up that are utilizing modern technology to disrupt the market. These startups are drawing large investment, which gives an indication of their potential future growth. In the remittance market, it seems that venture capital is now the way to go.
What follows is a report on modern remittance companies who have embraced venture capital investment.
WorldRemit
WorldRemit is a UK-based company who received $40m from Accel Partners in 2014, the company that formerly financed Spotify and Facebook. A year later, the company received $100m through funding led by Technology Crossover Venture. In 2017, they raised another $40m and LeapFrog was the most notable investor.
This Singapore-based money transfers company received $500,000 from Global Founders Capital in 2015. The next year, they managed to raise $5m from Vertex Venture Holdings, Fullerton Financial Holdings, and Global Founders Capital. In 2017, the company raised $13m with the help of investors like Vertex Ventures and Fullerton Financial Holdings.
TransferWise
In 2012, the UK-based company raised $1.3m in seed capital with the help of various investors like IJNR Ventures and IA Ventures. The following year they raised $6m and $25m in 2014. In 2015, they were even more successful, managing to raise $58m. Other companies The above companies are not the only ones taking advantage of venture capital opportunities. Azimo, Remitware Payments, and CurrencyFair are also on the list, and it looks like others will be jumping on the bandwagon soon. The companies are using the funds in different ways, though establishing infrastructure seems to be a popular application.
Because of this type of venture capital investment, it is projected that the cost of international money transfers will progressively decrease in the future.
