Money Transfer Startup WorldRemit Collects Its First Investment, $40M From Accel

WorldRemit, a London-based startup that is tackling the antiquated consumer money wiring/remittance market with an easy and traceable online solution, has collected some money of its own: a $40 million investment from Accel Partners, the storied VC that has backed big consumer plays like Supercell and Facebook but also a number of financial services startups like GoCardless, Funding Circle and Braintree. This is the startup’s first VC investment, and one of the largest-ever Series A rounds achieved in Europe.

WorldRemit is addressing two different business opportunities with its product. The first is a basic consumer issue: there are a number of people who live abroad or immigrate to make more money, with the intention of sending some of those earnings back home — home being a range of different countries and currencies around the globe. They typically want easy, cheap and reliable ways of doing that, but many of the most common routes today involve spending the time travelling to a physical location that offers Western Union or MoneyGram transfers, paying a large commission fee, and then getting recipients to do the same at their end.

The second is more of a business and legal issue: financial regulators looking to reduce money laundering and funding for illicit activities like terrorism are increasingly cracking down on remittance services that cannot provide a clear enough electronic track of how money has moved.

WorldRemit is looking to solve both of these challenges. Its solution lets consumers make transfers from any computer or phone, and receive that money either straight into bank accounts, or mobile wallets or in the form of mobile airtime. And by its nature, the transfers are electronic and more traceable than those of offline services.

The company currently lets people send money to some 100 different countries and the funding will be used to extend that to over 200, co-founder and CEO Ismail Ahmed tells me.

It will also be used to extend the variety of ways that the money can be paid out: one other big issue for people sending money to family back home is the concern that it may not be getting used as intended, and so creating more channels for specific payments — say, for utility bills or education fees — is one way of solving that problem. (It’s a solution that is also being tapped by a startup I wrote about last year called Regalii, which cleverly offers its customers the option of selecting gift cards for specific services as one way of guaranteeing how the money gets spent.)

Harry Nelis, who led the investment for Accel, says that he was attracted to WorldRemit both because of the traction that the startup has already seen with users in the markets where it operates, but also because of the track record of the founders.

Ahmed and Catherine Wines, his co-founder and COO of WorldRemit, both have been working in the remittances industry for 20 years. Ahmed has an economics PhD and has been a compliance advisor at the UN, with a focus on East African money transfer services, and he founded WorldRemit while studying at London Business School.

Wines is a qualified accountant who had been MD of First Remit, another international money transfer business acquired by Travelex.