It seems there’s still money be made in money transfers. Azimo, the UK-based social money transfer service that competes with legacy players Western Union and Moneygram, and to a lesser extent, PayPal, has raised just over $1 million in seed funding from the European arm of VC firm eVentures. Existing angel investors also participated in the round, including CapitalOne founder Matt Cooper, which brings the company’s total funding to-date to around $1.5 million.
Azimo says the new capital will be used to expand the service to other parts of Europe, in terms of who can send money (the service already supports 190 destination countries around the world). TechCrunch understands that Germany will be first, with Ireland, France, Spain, and Netherlands pegged to follow on the startup’s roadmap.
Launched in August 2012, Azimo aims to disrupt the remittance industry by letting users transfer money internationally to friends, family or other contacts via the Web, its mobile apps or Facebook, charging between 1% and 2% of the transaction, which is significantly cheaper than the rates charged by the likes of Western Union, PayPal or the indeed the banks. The recipient receives the money either in their bank account, at local cash collection points, or as “mobile wallet” top-up credit.
Talking up the size of the online money transfer market as a whole — $500 billion, citing the World Bank — Azimo claims 30,000 registered users, and says that 60% of customers make a repeat visit in their first month. To mark its one year anniversary, the company is waving its fees from today till the end of October. I guess that’s one way to spend VC money.
In a canned statement, Azimo’s fund raise seems to have got the approval of the UK Government’s Secretary of State for Business, Innovation and Skills, Vince Cable, who says: “This German investment into a British startup demonstrates that the UK has the infrastructure, the skills base and the competitive edge to capitalise on our expertise in both financial services and digital technology and UKTI is working to ensure that the UK is leading the way in the FinTech revolution. Competition in the financial services sector is vital to ensure consumers get the best deal possible and I commend Azimo on securing this financing.”
Of course, Cable is right, the UK does punch above its weight in financial services, and this is also translating to FinTech. To that end, another potential competitor in Europe is the multiple VC-backed TransferWise. However, Azimo is more about consumer transfers via collection points akin to Western Union, while TransferWise largely targets bank transfers, particularly by businesses, not least startups.
Cue the now obligatory statement from Joanna Shields, CEO to Tech City UK, the British government organisation charged with trumpeting startups in London: “Fin-tech is a lucrative and exciting growth market with many start-ups and young businesses creatively disrupting traditional models and re-imagining our relationship with money. I hope that Azimo’s success and this funding milestone will inspire other investors to join in the new wave of financial innovation happening in London.”