WorldRemit enters SA market as it eyes possible listing

WorldRemit, a UK company that specialises in money transfers into Africa, plans a new funding round in the next six months ahead of a potential initial public offering or buyout.

The fast-growing financial technology firm is seeking more cash as it continues to expand, Andrew Stewart, MD of operations in the Middle East and Africa, said in an interview in Johannesburg on Wednesday.

Founded in 2010 by a London student who was struggling to send money home to Somalia, WorldRemit’s investors include Accel Partners and Technology Crossover Ventures, early backers of Facebook.

“We have moved from a start-up company into a strong growth phase and have an aspiration for an IPO that’s about two years out,” Stewart said.

The executive was speaking after WorldRemit secured a South African licence that will let customers transfer money to other countries on the continent. That gives users the ability to send cash from within Africa — as opposed to from the UK and the US.

The company has also secured partnerships with MTN Group and Vodacom Group to access their pan-African mobile money services, Stewart said, adding to similar deals with Kenya’s Safaricom and Huawei Technologies of China. Mobile payments are a popular way of making transactions in large swathes of Africa, where credit card machines and banks with working ATMs are relatively scarce.

Largest market

“Africa is our largest market, and without a lot of bricks and mortar infrastructure we are able to offer money transfer services at much better rates” than lenders, Stewart said.

WorldRemit was valued at about US$800-million after its fourth and most recent funding round in December 2017, according to Stewart. That brought the total raised by the company to $225-million, with LeapFrog Investments joining Accel and TCV as investors. A fifth cash-raising would help the company push for more sending licences in countries such as Kenya and Tanzania, as well as partnerships in the Middle East.

Founder Ismail Ahmed, who started WorldRemit with about $200 000, moved to the role of executive chairman last year to make way for a more experienced CEO in Breon Corcoran, the former head of British betting firm Paddy Power Betfair.

According to the World Bank, people in South Africa transfer $2.5-billion out of the country every year, of which half goes elsewhere on the continent.  — (c) 2019 Bloomberg LP