While Facebook moves deeper into using its Messenger platform as a vehicle for people to transfer money to each other, an app built for helping people transfer money is adding more messaging features. Seattle-based mobile remittance app Remitly — which lets people in the U.S. send money to India or the Philippines — has acquired Talio, a picture messaging app co-founded by ex-Amazon engineers with Snapchat-like features to let images and text disappear if you wish.
Talio will continue to run its existing app for the time being, but it sounds like over time certain features will simply be folded into a new Remitly app.
The terms of the deal have not been disclosed but the acquisition includes the hiring of all of Talio’s staff, including founders Piragash Velummylum and Jordan Timmermann, and its technology. It sounds like at least part of the acquisition was made in shares: with the deal, Remitly will gain a number of Talio’s investors, too.
Talio, which originally launched in 2013 as Wire, had raised $2.3 million from Vulcan Capital, Zillow CEO Spencer Rascoff, Rud Gadre, Richard Kiphart and others including TechStars. (Remitly has raised $23 million, including a $12.5 million round earlier this year led by DFJ.)
While Remitly and Talio were in different app categories — respectively finance and messaging — they have something in common, besides both being based in Seattle. Both messaging and remittance services are overcrowded with competition, and with the economics of both favoring scale, there’s already been a fair amount of consolidation in both categories.
“We saw that there is a lot of increasing segmenting in messaging, and there is a lot that is just iterative and redundant,” said Velummylum in an interview.
Talio never managed to break into the big time, and it is not revealing how many users it amassed, but Remitly has actually been growing at a nice pace.
The startup says that these days, $300 million is being sent through its app annually, with its customer base growing almost 400% in 2014 versus 2013.
Remitly had actually been an early mover in making the connection between money transfer and messaging on the same platform.
“We understood that transferring money when thousands of miles away is a personal gesture and so we wanted to created deeper connections between our users,” CEO Matt Oppenheimer said in an interview. “We recognised that messaging was at the heart of it so we built a messaging feature into our app in 2013. Talio reiterates that strategy with more technology and talent.”
Remitly is not the only one eyeing up that developing market opportunity. Facebook arguably has been pursuing remittance services in part to attract more users in developing economies by offering the kinds of services that they already use and need on their mobile phones.
Remitly has also tried to show leadership on the tech front. Remitly claims it was the first mobile payments company to implement Apple’s Touch ID for iOS users.
Joining forces not only makes the single product bigger, it potentially can help Remitly differentiate from the rest of the pack.
Today, Talio’s app lets people take photos, videos, and “tilts” — GIF-like photos that move as you move your handset — and then overlay stickers, a few words, or a longer chat within them. Users can choose to keep their messages forever, or delete within 24 hours.
It’s not clear what aspects of Talio’s existing app will be incorporated into Remitly, but there is also the possibility that the talent Remitly is picking up will be on hand to develop yet more features.
During his time at Amazon, Velummylum was the person who prototyped and first pitched the idea of the Cloud Drive and Cloud Player to Jeff Bezos, Amazon’s CEO, and then ended up founding the Cloud Drive team.
Timmermann, meanwhile was the lead engineer for Amazon Instant Video on the Kindle Fire and Kindle Fire HD, and helped design the X-Ray for Movies feature.
There is a lot of work to do. The World Bank estimates there will be $646 billion sent between family and friends this year, and the U.S. dominates when it comes to origination of those transfers. Interestingly one of the world’s biggest players in transfer, Western Union, only has around 17% of the market, underscoring the fragmentation in the industry. And while Remitly looks to pick up more users in the three markets where it already operates, it still has most of the world left to tackle.