Sending money from one country to another — either because you are a business paying someone for a service, or a family member working abroad and sending money back home, or something in between — is a huge business, worth some $700 million annually. Today, a London startup called Currencycloud, which has built a set of remittance APIs that let any financial business integrate money transfer services into its platform is announcing that it has raised $80 million to tap into that opportunity, and to help take on the Western Unions of the world.
To date, over $50 billion has been transferred between some 180 countries using Currencycloud’s 85 APIs, which cover areas like inbound money collection (helping clients get paid), foreign exchange, outgoing payments, and digital wallet services managing multiple currencies and more. Mike Laven, Currencycloud’s American CEO and founder, tells TechCrunch that the company has some 350 companies using its APIs as of the end of 2019, and it employs 230 people, but you are almost certainly never going to see it, even if you’ve used it.
“No one is doing what we’re doing in terms of the model we have,” Laven said, referring to what he describes as an “embedded model” where transfer is seamlessly embedded into its customers’ platform and workflow. “I’m not competing with our customers. My brand is invisible. We think we’re still the only one that has that kind of solution.”
This round, a Series E, has a number of heavy hitters among Currencycloud’s new strategic investors. They include Visa, the World Bank Group’s International Finance Corporation, French bank BNP Paribas, the SBI Group (the Japanese giant that was once a part, but now independent, of SoftBank) and Thailand’s Siam Commercial Bank, and with that, Laven says that Asia will be a big focus for the company in the year ahead.
At least one of these, Visa, is also integrating Currencycloud’s services into its own. Existing investors Sapphire Ventures, Notion Capital, GV (formerly known as Google Ventures, which led its Series D), Accomplice, and Anthemis are also participating.
As for the valuation, Laven said it was not being disclosed but was certainly higher than when it previously raised. For some context, we first reported the news that Currencycloud was raising last summer, and at the time, when it had closed about $40 million of the funding, PitchBook estimated the pre-money valuation at $114 million and post-money at $184 million. That would imply that this round puts the London-based startup’s valuation at around $220 million (and took somewhat longer to close than originally planned). To date, Currencycloud has raised $140 million.
The startup has been around since 2012 and was early to identify the opportunity in the money-transfer market.
The trend of globalisation in the world economy has led to a sharp rise in the pace of remittances, helped by the expansion of the internet and smartphone usage — which has spelled opportunity for companies leveraging the latter to enter the market. In terms of those companies providing money-transfer services, while there are some notable legacy names like Western Union and Moneygram, by and large it’s a fragmented market — leaving an opportunity for many more hopefuls to get involved.
On top of all that, the system is largely expensive and inefficient — meaning there was a lucrative opportunity for a company to come along and provide an easy way to plug into the rails — say, by way of APIs — to build these services (not unlike what companies like Adyen or Stripe have done for e-commerce payments).
All roads, effectively, led to Currencycloud, and it’s seen business expand. To date, Currencycloud says that it has processed more than $50 billion in cross-border payments, with the proliferation of so-called neobanks (or challenger banks, going head-to-head with traditional institutions in the business of deposits and lending using an all-digital platform) helping it along. Customers include Monzo, Moneze, Starling, Revolut and Dwolla — alongside the likes of bigger players like Visa now also getting involved.
“I’m delighted to be joining the board of such an exciting technology company,” added Colleen Ostrowski, SVP and Treasurer at Visa, in a statement. “Currencycloud is re-shaping the way that the platforms of the future are moving money around the world, and there is huge potential for the company to drive further innovation in the cross-border payments industry.”