London-based money transfer startup WorldRemit secured $40 million for its Series A round, TechCrunch reported.
The investment came from Accel Partners. The financing is WorldRemit's first investment received from a venture capital firm and represented one of Europe's most substantial Series A funding rounds. Accel Partners has also backed other financial services companies, including Funding Circle, GoCardless and Braintree, the report said.
WorldRemit seeks to find a solution to two issues in the money transfer segment. The first is a basic concern of consumers who have gone to work abroad-that of being able to send money back to their home countries using cheaper, easier and dependable ways. However, most of popular methods today are cumbersome as they involve spending time and effort going to a physical location both to send and receive the funds, the report said.
The second concern that WorldRemit intends to address is the business and legal aspect. Financial watchdogs are clamping down on remittance services that are incapable of giving a transparent electronic record of the movement of funds in their quest to reduce money laundering to finance illegal activities, the report said.
Through the service they provide, WorldRemit allows customers to transfer funds using their computer or phone and enables recipients to get the amount into their bank accounts or in mobile wallets through mobile airtime. Since the transfers are done electronically, the flow of money is easily tracked compared to those that provide offline services, the report said.
WorldRemit Co-Founder and Chief Executive Officer Ismail Ahmed told TechCrunch in an interview, "This industry has largely remained offline until now. The market share for online remittances is just 5% today, but we expect this to increase to 30%."
With the proceeds from the most recent round, WorldRemit intends to more than double the current number of 100 different countries where money can be sent. It also intends to use the funds to add to the different ways that the funds can be received by recipients so that the money can be used properly, the report said.
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