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|
|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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