WorldRemit, a London-based online money transfer service, has secured a $40 million series a investment from Accel Partners to help it muscle into the huge global remittance market.
Traditional money transfer giants Western Union and MoneyGram currently dominate the remittance market, which according to the World Bank is worth $519 billion. However, WorldRemit argues that these established players use expensive and inefficient physical networks and rely on cash, creating compliance risks.
WorldRemit is hoping to challenge them through its online platform, which can be accessed via mobiles and already lets migrants and expats from 35 countries send remittance payments to families and friends in over 100 destinations.
The firm has partnered with banks, mobile operator hubs and mobile money transfer networks including M-Pesa, to build its network. Senders can use its platform to make payments by debit or credit card, or via bank transfers, while recipients receive funds via bank deposit, direct transfer to mobile wallets, cash pickup or delivery, and airtime top-up.
It now plans to use the Accel Partners money to expand its staff from 50 to 200 people and move into new geographies.
Ismail Ahmed, CEO, WorldRemit, says: "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."
In a related development, another UK-based remittance start-up Azimo has closed a $10 million investment round led by Greycroft Partners.
Launched in August 2012, it currently supports money transfer from numerous European countries to 192 countries globally. The company says it will use the funds to accelerate European expansion and target other key markets in North America and Asia.