CurrencyCloud, which builds tools that payment companies can employ by way of an API to enable remittances and money exchanges that transcend borders, has managed to rake in £20 million ($25 million) in a Series D funding round led by Google’s GV.
The news follows one day after U.S.-based Veem (formerly Align Commerce) raised $24 million to now expand its remittance services internationally, with GV also participating in that funding round.
Bringing the total amount raised by CurrencyCloud to approximately $61 million, other investors participating in this round included previous backers Notion Capital, Sapphire Ventures, Rakuten FinTech Fund, and Anthemis.
In a world that is defined by the fragmented nature of money transfers – with incumbents including Western Union and MoneyGram; as well as a sizable pool of startups including Veem, WorldRemit, Xoom, Azimo, Regalii, Remitly and TransferWise — CurrencyCloud sets itself apart in its claim of building the mechanics for how to move money between specific markets without ever selling the service to the end users itself.
Instead, its function is to package its remittance infrastructure (finding exchange rates, transferring funds between two end points, and meeting local compliance at both ends) up by way of an API, put to use by hordes of other remittance companies to create services for individuals abroad to send money to family back home (wherever the location), for businesses to pay money to each other, etc.
It was this very issue of fragmentation, and the complexities that come with the interconnections to make money transfers function smoothly, that made GV want to back this company. Tom Hulme, a partner for GV in London, said:
It’s a huge problem to solve, not just switching currency but moving across borders and staying true to compliance.
He noted that, much like the growth of so many other markets, “now it’s all about developers,” which means that complexity is being solved by technical solutions, with CurrencyCloud providing the tools to assist with that.
Although the company is not disclosing current revenues or valuation in this round, a few years ago, when CurrencyCloud raised $10 million in 2014, it noted that it in a year, it made only $3 million on transfers of about $400 million, which worked out to a 0.75% margin. Putting this in perspective today, Laven commented that it processed $6 billion last year. Working out a similar percentage would mean that revenues have grown to $45 million (under the assumption that the percentages have stayed constant).
This latest inflow of funds will be used to continue building out CurrencyCloud’s business, specifically by building out its business in the U.S. to woo more customers there, both in terms of companies served and infrastructure. Laven said:
The U.S. cares more about transfers to Canada, Latin America than Europe does. Europe cares about Great Britain.
About the post-Brexit atmosphere, he said:
I think the climate is okay right now for raising money. There was no Brexit pushback. My feeling is that things are okay right now, no evidence of a wait-and-see attitude. We’re a solid company with a good track record and people didn’t have any concerns other than the normal due diligence concerns.