Remitly’s IPO: Seattle’s Wise Guys Seek A Share Of Migrant Money
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Payment startups can certainly raise a lot of money if they can promise to disrupt the remittance market. The 10-year-old Remitry, whose mission is to “change the lives of immigrants and their families”, is really in tune with the times. The Seattle-based company was revealed this week at a valuation of $ 7 billion. This is a big step from the $ 1.5 billion valued just 14 months ago.
I can understand the excitement. money transfer It’s a big business. Last year, formal channels alone sent an estimated $ 445 billion to developing countries. According to the World Bank. The industry has long been dominated by banks and traditional in-store monetary agents such as Western Union and MoneyGram.
The fees are often high and the transfer times are long. It encourages startups around the world to take advantage of technology to send and receive money faster, easier, and cheaper.
While Remitly allows immigrants to send money home for less, the stock is not for investors. The shares are currently valued at around 27 times their 2020 earnings. It’s the same as Wise, a UK-based money transfer startup that was unveiled earlier this summer. Yet Wise is twice as profitable and profitable.
Certainly, there are differences between the two companies. Wise focuses on inexpensive interbank transfers between developed markets. Remitly focuses primarily on immigrants, where cash and prepaid mobile phone charges are the most common means of transfer.
The two companies compete with Western Union for pricing. Given the influx of new entrants into the remittance market, this is not a sustainable competitive advantage.
The pandemic has accelerated the transition from physical to digital transfers. However, settlement societies with diversified income bases look more like long-term bets than so-called “monolines”. Wise is making better strides here, expanding into products like debit cards and small business services.
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Remitly’s IPO: Seattle’s Wise guys looking for a share of migrants ‘money Source link Remitly’s IPO: Seattle’s Wise guys looking for a share of migrants’ money