LONDON — US money transfer startup Remitly is launching its service in the UK, the company announced late on Tuesday.
Remitly lets people send money internationally and focuses on the so-called remittance market. Remittance is where migrants send money to family and friends overseas, usually to help them pay for essentials. The company is the largest independent money transfer service in the US, facilitating $US2 billion (£1.6 billion) of transfers annually.
CEO and founder Matt Oppenheimer told Business Insider: “70% of the money sent by our customers is to pay for living expenses, based on surveys we’ve done. It’s a really regular, recurring transaction. Our customers largely move abroad with the purpose of sending money home to support their loved ones.”
Oppenheimer, who cofounded Seattle in 2011, said: “Part of why I started the business was I lived in Kenya and I saw how far that money went. It’s very different from the expat UK market. The fees are a lot higher, it’s a lot more complex but I think it’s an area where you can make a much bigger impact.”
Remitly will begin by offering its digital service, available on both desktop and mobile, to migrants in the UK who want to send money to India and the Philippines. Over £2.8 billion is sent from the UK to India annually and over £400 million to the Philippines.
“The UK is exciting in a sense in that it’s got the fifth largest immigrant population in the world, 8.5 million immigrants,” Oppenheimer said. “They send over £19 billion a year. We’re really excited about coming over here and offering our product to a lot of customers.”
Oppenheimer says Remitly began the process of planning for expansion to the UK prior to last June’s vote to leave the European Union but said that Brexit is not a major set back.
He said: “We’ll obviously watch as things develop. But the reality is, in the US, there’s a state-by-state licensing system and so regardless of how things play out we feel like we’ve got a great strategy. We’ll start with the UK, it’s a great market to start, it’s where a lot of fintech is happening, and then we can formulate our strategy for the rest of the EU as negotiations play out.”
Remitly has a formidable war chest to take them on, having raised $US100 million (£80 million) to date from backers including Silicon Valley Bank, DFJ, QED Investors, Amazon founder Jeff Besoz and Microsoft’s billionaire cofounder Paul Allen.
Oppenheimer played down the competition element, saying: “If you look at the research, 5-10% of remittances right now are originated digitally and so the real competitors are offline cash-based players. I think it’s an exciting time actually for a lot of digital players right now because that adoption curve and shift is there. I think there’ll be a few digital players that win.”
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