Remitly secures $220m to add services beyond remittances

Remitly , a Seattle-based online international money transfer service, announced $220 million of new financing on Wednesday to expand its global customer reach and stretch beyond remittances into other areas of financial services. [caption id="attachment_182315" align="alignright" width="300"] Remitly co-founder and CEO Matt Oppenheimer[/caption] Matt Oppenheimer, co-founder and CEO of Remitly, said he couldn't get into specifics on the additional financial services the company plans to provide, but he noted other pain points Remitly's largely immigrant customer base faces, such as getting a loan with no credit history, buying insurance or opening a bank account. "Even if you get a bank account, it might not meet the needs that you have, specifically, as an immigrant," he added. The fundraising includes $135 million of Series E equity, which Oppenheimer said will be used to fuel geographic expansion. He said $85 million of syndicated debt financing will be used to expand Remitly’s pre-funded transaction service that allows users to send instant payments through certain partners. The equity component of Remitly’s latest financing was led by Generation Investment Management, with participation from Owl Rock Capital, Prudential Financial and Naspers’ PayU, among others. Debt financing came from Barclays , Bridge Bank , Goldman Sachs and Silicon Valley Bank . Remitly allows users to send and receive money via a smartphone app, eliminating forms, codes, agents and other fees typically associated with the international money transfer process. Over the past year, the service has expanded to 16 countries from which customers can send and 44 countries where funds can be received, and annual revenue growth has nearly doubled each of the past three years, the company stated. The company transfers more than $6 billion in annualized volume through a proprietary global money transfer network across Africa, Asia, Central Europe, Central and South America, and has more than 1 million customers. Oppenheimer said he expects to continue to add to his roughly 1,000-employee workforce and open two new offices in the near future, although he didn’t say where. Aside from its Seattle headquarters, Remitly currently operates out of offices in London, the Philippines and Nicaragua. Remittances to low and middle-income countries reached a record $529 billion in 2018, up about 10% from the previous year, while total global remittances reached $689 billion in 2018, up from $633 billion in 2017, according to the World Bank . While Remitly's $6 billion in annual transfers would account for less than 1% of that total remittance volume, Oppenheimer said its efforts to build out its local payments infrastructure on multiple continents already are helping to accelerate growth. Of the 44 receiving countries on Remitly’s platform, 34 came online in just the last 18 months, he noted. The cross-border remittance space is a crowded one, and highly funded of late. London-based money transfer startup WorldRemit raised $175 million last month while TransferWise , another London-based money transfer startup that's edging toward becoming a challenger bank , reeled in $292 million in funding in May. TransferWise last month unveiled an international travel debit card for U.S. customers that works in more than 40 currencies and offers local bank details in certain countries. Also last month, WorldRemit rolled out a business-to-business cross-border payments product. Oppenheimer said other fintech firms and banks tend to target money transfers for "developed-to-developed" markets, which normally entail just bank-to-bank transfers. Remitly, however, goes after the "developed-to-developing" market, which can get a little more complicated. "We've built out all of our own rails to deliver funds instantly in developing countries, where they can be picked up in cash, via mobile wallet or by door-to-door delivery, which, believe it or not, is very popular in some markets," he added. Asked if there were any plans to take Remitly public, Oppenheimer replied, "We're just focused on building a great business that serves more and more customers around the globe and, if we do that, an exit like an IPO in the future will take care of itself."

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Remitly secures $220m to add services beyond remittances

Brazilian challenger banQi is working with a mass retailer to lock in customers

Startup Branch wants to build a money services platform for hourly workers

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