Western Union, the titan of the “cross-border money transfer” market, with a ~15% worldwide market share, is being challenged by multiple well-capitalized upstart companies targeting the $436B remittance market. These new companies are aiming to get a piece of the fees that companies like Western Union and MoneyGram charge. Reports estimate that these changes could save developing countries as much as $16B/year.
There has been pressure on their fees for some time as the graph below shows the decline of global average costs associated with sending $200 internationally from 2008 to Q3’14. Specifically, the global average has fallen from ~10% of the transaction to 7.9% in Q3’14, while the average weighted by the size of the bilateral remittance flows has fallen from ~8.5% to 5.7% in Q3’14.
Source: World Bank
Below we’ve compiled a list of 12 startups going after the incumbents in the remittance space. Some, like BitPesa and ZipZap, are among those looking to leverage bitcoin as a potential solution to this problem. Others, like London-based WorldRemit, have raised over $100M in funding and are using digital payments paired with the increasing penetration of mobile devices in developing countries to lower fees and make remittances more financially accessible worldwide.
| Company | Last Funding Round | Total Disclosed Funding ($M) | Select Investors |
|---|---|---|---|
| WorldRemit | Series B | 140.0 | Accel Partners, Technology Crossover Ventures |
| TransferWise | Series C | 90.3 | Seedcamp, Andreessen Horowitz, IA Ventures, Valar Ventures |
| peerTransfer | Series C | 43.25 | Spark Capital, Accel Partners, Bain Capital Ventures, QED Investors |
| Currency Cloud | Series B | 17.0 | Atlas Ventures, Silicon Valley Bank, Notion Capital |
| Azimo | Series A | 11.5 | Greycroft Partners, e.ventures, TA Venture, Frontier Investments Group |
| Remitly | Series A | 11.25 | Bezos Expeditions, Trilogy Equity Partners, QED Investors, TomorrowVentures |
| Pangea Payments | Series A | 6.0 | OCA Ventures, Chicago Ventures, KGC Capital, Jump Capital |
| Ripple Labs | Series B | 5.5 | Lightspeed Venture Partners, Google Ventures, Andreessen Horowitz, IDG Capital Partners |
| Chime | Angel | 4.27 | Undisclosed Investors |
| Ayannah Information Solutions | Seed VC | 4.0 | Wavemaker Partners, Golden Gate Ventures, Beenos Partners, IMJ Investment Partners |
| CurrencyFair | Seed VC | 2.5 | Frontline Ventures |
| Zipzap | Seed VC | 2.3 | Blumberg Capital, TriplePoint Capital, 500 Startups |
| BitPesa | Seed VC | 1.13 | Stephens Investment Management, Bitcoin Opportunity Corp., FuturePerfect Ventures, Pantera Capital |
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