Digital payments have gained prominence this year as people increasingly find ways to avoid public spaces. Remittances in particular, are experiencing a global boost in digital payments as migrant workers send out money to help loved ones and friends in their home countries.
Confirming this trend, WorldRemit, the British online money transfer company announced last week that it will be purchasing African focused remittance service Sendwave. WorldRemit was founded in 2010 by Ismail Ahmed, a former London student who found it difficult to send money home to Somalia. It has the reputation of being one of the first online money transfer startups focused on mobile-to-mobile money transfer.
Sendwave is a pioneering and fast-growing app-based digital remittance service tailored to East and West Africa, adding Bangaldesh its first Asian receiving market over the summer. Sendwave offers instant, low fee, digital payments from North America and Europe to Africa in as little as 30 seconds. At the time of the purchase announcement, Sendwave had over 100,000 customers that benefit from its world class security and a strong reputation.
While the amount of the transaction has not been explicitly disclosed, Bloomberg has estimated that the cash and stock sale will be worth over $500 million. The combined company will reportedly be valued at more than $1.5 billion according to an undisclosed source close to the deal. In the financial year ending June 30, both companies sent a total of $7.5 billion in transfers, generating around $280 million in revenue - a total year over year growth of over 50%.
Speaking about the acquisition, Breon Corcoran, WorldRemit’s CEO, revealed that the company was interested in Sendwave because both businesses share a common goal, which is to enable clients to easily send financial support to family, friends, and businesses in other countries, with inexpensive fees. He further stated that the combination of WorldRemit’s money transfer network (one of the largest and most accessible in the world) with Sendwave’s service will enable WorldRemit to expand in the African market and better meet customers’ demands for fast and secure digital payments.
Regarding the future, Corcoran is betting that the pandemic-fueled shift to digital banking will become permanent. “What we saw immediately after lockdown orders is a real acceleration toward digital, with the rate of new account activations more than doubling this year,” he said. Sendwave will continue to operate independently and retain control of its own mobile applications, brand, management, employees, and key parties. WorldRemit is likely to close the acquisition in the Q4 2020 subject to licenses and regulatory approvals.