Higher-paid African expatriates sending cash to home countries
Money-transfer company has Facebook backer Accel as investor
WorldRemit Ltd., a British money-transfer operator, sees revenue from transactions involving Africans doubling by 2020 as more people on the continent access mobile-payment platforms and expatriates send cash home.
The seven-year-old company, in which Facebook Inc.-backer Accel Partners LP invested $40 million in 2014, will this year open a regional office in South Africa, its largest market on the continent in terms of money-transfer value, founder and Chief Executive Officer Ismail Ahmed said in an interview. Another site will start operating in Kenya, where the London-based business sees Africa’s highest number of individual transactions.
“In the next two years we should be doubling our volume every year,” Ahmed said in Kenya’s capital, Nairobi. The continent accounted for half the company’s 2016 revenue of 41 million pounds ($52.6 million), he said, declining to give profit figures.
WorldRemit is tapping into growing demand in Africa for mobile-payments, which are popular in places where banks are scarce or unreliable yet internet speeds are fast enough to handle finances through smartphones. The company has partnerships with Safaricom Ltd., Kenya’s biggest company, and Johannesburg-based MTN Group Ltd., which are both boosting sales growth by investing in the market.
Ahmed founded WorldRemit in 2010 after struggling to send money to relatives in Africa while studying in London. The company has since secured licenses from almost all 50 U.S. states, which together with Latin America is its fastest-growing region in terms of transactions in part due to African expatriates, according to Ahmed.
“Kenyans in the U.S. tend to have high paying jobs,” Ahmed said, adding that would mean higher amounts of cash sent home.
The company estimates the number of transactions made by customers worldwide will more than double to 6.7 a month by 2025. It also plans to open a Singapore office in 2017.
Following Accel’s investment, U.S. private equity form Technology Crossover Ventures LP put in $100 million two years ago.