After launching in Somalia sometime last year, and in Ghana early January, online money remittance service WorldRemit, today closed a $40 million investment round from Accel Partners, it’s first ever and largest Series A raised in Europe.
The 2009 founded firm, has a partnership with Safaricom’s M-PESA, international banks, mobile operator hubs among others and enables over 1.3 million remittance transactions annually. It’s first ever round will help the firm with slightly over 50 employees to expand rapidly in 2014, employe more staff to 200 employees by the end of the year and launch into new markets and develop additional products and services.
“We expect the online money transfer sector to account for approximately 30% of the remittance market in the next few years and that WorldRemit will be at the forefront of this change. We offer the most extensive range of pay-out options unmatched by any money transfer firm, including payments to mobile wallets and international airtime top up, which enable recipients to receive their money even where there is limited or no banking infrastructure.” said Ismail Ahmed, Founder & CEO at World Remit in a statement. “Accel Partners with their global network and extensive expertise in the payments industry is the perfect fit for WorldRemit. We are excited to continue our rapid growth trajectory with their support.”
According to The World Bank, $519 billion of remittance payments were made in 20121, mostly via traditional players such as Western Union and MoneyGram, as well as a plethora of smaller and informal operators. The majority of these payments are still conducted via a network of physical locations, resulting in an inefficient and expensive user experience. These traditional operators also create compliance risks associated with acceptance of cash at corner shops that leaves no audit trail.
Accessible via mobile phones and tablets, and with ability to make payments by debit or credit card, or via bank transfer, WorldRemit’s online platform enables migrants and expats to send quick, convenient and low cost remittance payments to families and friends abroad. The platform’s customers can send funds from 35 countries to families and friends in over 100 destinations who can receive funds via bank deposit, direct transfer to mobile wallets, cash pickup or delivery, as well as airtime top-up for their mobile phones. This is the disruption that Accel Partners wants.
Harry Nelis, Accel Partners said: “WorldRemit is moving remittance online, disrupting a traditionally offline business and democratizing payments. We are excited to be partnering with a team with the deep industry expertise that has enabled them to build the robust technology and strong compliance needed for a secure, trusted and world-class remittance business.”
Apart from being expanded to Ghanaians in mainland Europe, members of the Diaspora living in the UK, Canada, Australia, Netherlands, Germany, Italy and Spain can use the service to transfer funds from the comfort of their own home or office 24/7 for much lower fees.
Ghana was chosen because it is one of the largest recipients of international remittances in Africa according to a Bank of Ghana report which saw remittances through formal channels hit $1.79 billion in 2009 and accounting for 11% of GDP.