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It is a good time to be in the money transfer industry. Remessa Online, a Brazilian fintech company, has just closed a new $20 million funding round from an elite group of investors. This transaction came a day after we reported about the latest funding by TransferGo, the UK money transfer firm.
Remessa Online growth story continues
Started in 2016, Remessa has become among the fastest-growing fintech companies in Brazil. The company has helped its customers from more than 100 countries send more than $2 billion.
Like TransferGo, the firm has become essential for businesses and individuals to send money abroad at a reasonable cost. In its website, it says that its customers save a substantial amount of money whenever they send money.
By targeting Brazil and Latin America, the company is looking to win a significant market share in international funds transfer. According to Pew Research, remittances from the United States to Brazil total around $593 million every year. At the same time, while global remittances are expected to fall this year, analysts expect that the industry will continue after the pandemic.
According to Alexandre Liuzzi, the firm’s co-founder, Ramessa Online’s goal is to be more than a money transfer company. Today, Brazilians living abroad are able to invest money and pay for bills through the platform. It also allows them to have an International Banking Account Number (IBAN). This number allows them to receive money in 9 currencies.
The current funding round brings the company’s total funding to about $24 million. According to Liuzzi, the company will use these funds to expand its product portfolio and reach more people. He said:
“We believe in a world without physical borders. Our mission is to help our clients with their global financial needs, so that they can focus on what matters: their international dreams.”
New era for money transfer companies
The money transfer industry has been growing exponentially in recent years. In the United Kingdom, a company like TransferWise has raised more than $700 million while WorldRemit has raised more than $407 million. Similarly, Payoneer has raised more than $270 million while Ripple has raised more than $293 million.
At the same time, a company like Santander has launched PagoFx to enable easy international money transfer. And in 2015, PayPal acquired Xoom, which is relatively like TransferWise.
Almost two weeks ago, it was reported that Western Union had approached MoneyGram for a deal. In our analysis, we predicted that these activities would continue as the industry goes through changes.
Even with the funding, Remessa Online will not have an easy path in Brazil and internationally. For one, it will need to compete with better-funded companies like WorldRemit and TransferWise. Also, it will need to compete with Whatsapp, which launched its digital payment service in Brazil this week.
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