Two new P2P mobile money transfer start-ups –
American mobile transfer Beamit and UK based TransferWise – have
received funding to grow their cross-border remittance
services.
Go deeper with GlobalData
TransferWise
The young British remittance company
TransferWise has raised $1.3m from an angel funding round led by IA
Ventures, from New York.
Index Ventures, Paypal co-founder Max Levchin,
Kima Ventures and Seedcamp are some of the other investors backing
up the Transferwise seed funding.
“We will use this to continue on the same path
– expanding currencies, fuelling our growth and building a better
product,” said the Estonian founders of TransferWise, Taveet
Hinrikus and Kristo Kaarman, on their blog.
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By GlobalDataThe funding comes little more than a year
after they themselves started sending funds abroad.
Until now, the service has been available only
in pounds and euros.
The funding will help the company expand into
other countries and currencies in Europe by the end of May, the
founders said.
The Estonian entrepreneurs claim to offer the
cheapest rates in the market, explaining they adopted a P2P
crowdsourcing strategy, to lower their fees to a fraction of those
by other institutions – a business model similar to the one
adopted by Skype, where Hinrikus was the first employee.
The company was ranked second cheapest by the German newspaper
Frankfurter Allgemeine Zeitung early in April.
TransferWise charges start from £1 per
transaction.
In its first year, the company attracted a
total of $13.4m in transfer exchanges in its first year of
operation and more than 5,500 individual transfers with an average
of $2,300 per transaction.
“TransferWise is moving the money
transfer market to the 21st century at a time when many banks and
traditional financial services firms are forgetting innovation and
customer experience,” said Roger Ehrenberg, managing partner at IA
Ventures who will join the TransferWise board of directors, on the
blog.
Beamit
Founders
Co-op is leading the seed funding of Beamit, a mobile cross-border
remittance platform. Chris Devore from Founders Co-Op told
Dow Jones that the new money will be spent on engineers, developing
the product and “knocking down regulatory barriers”.
A total of
$2.4m was raised in the funding round to finance Beamit, which was
founded last year by Matt Oppenheimer, former head of mobile
and internet banking initiatives for Barclays Kenya.
Big tech
hitters Eric Schmidt, from TomorrowVentures, and Jeff Bezos, with
his company Bezos Expeditions, also joined the angel financing of
the m-money transfer start-up. Bezos also took part in
another angel funding that provided Beamit with $750,000 in
convertible debt back in November 2011.
Beamit’s app allows the user to send
money from the US to another country. The company aims for a slice
of a market that is worth $374bn a year, according to World Bank
estimates.
Oppenheimer’s main targets are the
developing countries, and transfers between America and the
Philippines have already been on trial. He is planning Beamit’s
public launch for the third quarter.
