Though the tech world is frothing over the potential found in new cryptocurrencies like Bitcoin, other companies have been working to solve the very real (if less buzzy) needs of today’s users who want a simpler, more cost-effective way to move money digitally. One such company is mobile money transfer service Remitly, which lets U.S. users send money to friends and family back home in the Philippines. Today, the company is announcing it has closed on a $5.5 million Series A round of funding, led by QED.
Most of Remitly’s existing investors also participated. Its other investors include Trilogy Partnership, Founders Co-Op, TomorrowVentures, Bezos Expeditions, and various angels.
According to Remitly co-founder and CEO Matt Oppenheimer, the company is excited to have QED on board because of their financial technology, operational, and marketing expertise. (The firm has invested heavily in the financial space, including in companies like Braintree, CreditKarma, TransUnion, SoMoLend, PeerTransfer, and more.)
“They share our vision to transform the remittance industry and have a very successful track record in financial services,” explains Oppenheimer.
The CEO first started the company (then called Beamit) back in 2011, following his working running Barclays Bank’s mobile and Internet banking programs in Kenya. That work gave him both insight and experience in how banking works in developing markets. At Remitly, he later built a team whose members came from a number of well-known companies, like Amazon, Microsoft, Western Union and Oracle.
Remitly takes advantage of the mobile platform to reduce the costs of running its business (no forms, no agents, etc.) and makes 3-day money transfers available for free to its end users. For immediate transfers, it’s $4.19-$4.99. Oppenheimer has previously explained that the service makes some revenue on the foreign exchange rate spread when it holds the money. Remitly competes with – and undercuts in many cases – other money transfer services like Western Union, Moneygram and San Francisco-based Xoom, which went public in early 2013.
Oppenheimer declined to provide specific metrics regarding Remitly’s traction and growth today, but would say that it’s now being used to send “millions of dollars” each month.
With the new investment, the plans are to accelerate Remitly’s global growth, and hire additional staff, including most pressingly, someone to take a senior role in driving the app’s UX design. The company recently updated its mobile application to add a chatting component, allowing uses to send free messages to others on the service in order to discuss the remittances being sent. The app supports iOS and Android, and is available here.