Qvo vadis remittances?

Recently, on FinTech startup scene we had couple of exciting moves connected with remittances. Seems that one of "the oldest business model in a book" is doing great. Even more - the traditional version of it (B&M locations) is on rise as well.

Target group is mostly blue collars which explains lack of innovations here, but also it makes me think - are we ready for cutting edge technologies? How long will we stick to old ways of sending money? What kind of innovations remittance businesses will introduce? Some answers below!

How big the market is?

Remittances to low- and middle-income countries reached a record high in 2018, according to the World Bank’s latest Migration and Development Brief. The Bank estimates that officially recorded annual remittance flows to low- and middle-income countries reached $529 billion in 2018, an increase of 9.6 percent over the previous record high of $483 billion in 2017. Global remittances, which include flows to high-income countries, reached $689 billion in 2018, up from $633 billion in 2017. Looks impressive! Details can be found here.

Let's come back to players on the market though. What has happened recently? (My top 10, feel free to contact me if you want add anything to the list :) )

1. Remitely just received $220 Million In New Funding and has grown revenue nearly 100% annually over the past three years, reaching an estimated $80 million in 2018 and recently earning a spot on Forbes’ Fintech 50 list. They plan to use received money to build new financial offers for migrants (I am guessing - they plan to enter e-lending space :))

2. PaySend is currently on Seedrs and already collected over £4,5 million They have PaySend link, multi-currency account and just launched a new global stablecoin on the Stellar network (that is the innovation and that is why I supported them on Seedrs). They use the technology which allows sending money directly on your card - which is really good for emerging economies.

3. TransferGo, earlier this year was campaigning on Seedrs and raised over €11 mln, not mention that in May this year, platform has added $3.4m (£2.6m) to its $17.5m series B funding round. The additional investment came from French venture capital firm Seventure Partners adding to a series B round which began in December last year.

4. Azimo - not this year, but in May last year got $20 million from Rakuten which adds up to 66 mln. total investment. They didn't seek financing this year (so far) however taking into consideration that they are recruiting actively, I believe that business is doing well (are they profitable tough? I am not sure, but would bet that if not, they are really close).

5. TransferWise became most valuable FinTech in UK. It has raised $292 million in last round of funding, giving it a valuation of $3.5 billion. To date, TransferWise has raised $689 million in venture funding.

6. We see on the market specialised players. Good example can be PayUkraine which focus on corridor TO UKRAINE and is extremely active with marketing offers (contests, discounts). Relatively new player, however after couple of months achieved more than a lot of mature businesses.

7. WorldRemmit has entered into a definitive agreement to raise $175 million in a Series D funding round led by returning investors, TCV, Accel and Leapfrog Investments. Also recently they partnered with Cashplus and Orabank for online money transfers to Morocco and Senegal, as well as earlier this year number of banks and financial institutions which you can find here.

8. Currency exchange app WeSwap has launched a £2.3 million crowdfunding round on Seedrs after hitting the 500,000-user landmark.

9. Facebook announced launch of Libra next year, and the master plan is to allow sending money to emerging countries (well, for me sounds like revolutionised remittances ;))

10. Do not forget about Western Union - the oldest player on the market which owns many brick-and-mortar locations and brought in $852 million in profit last year, charges roughly 5% (less than banks but well - a lot).

EDIT: Top 11 :) (16th of July)

11. PayPal Expands its International Money Transfer Service Xoom to 32 Markets across Europe. More here.

Qvo vadis remittances?

What are the next steps? Will those companies open borderless accounts and jump into business similar to Revolut (TransferWise already opened Borderless account in 2017, Remitely and PaySend seem to have similar strategy), or..they will look at our Chinese friends (WeChat, AliPay) and focus on B&M transfers or QRCodes, or... as some players, partnerships with B&Ms will became a solution. Adding cherry on top, how Libra will influence that sector?

My plan is to make a popcorn and watch the game.