Remitly's recent raise catapults it into the top three in our chart putting it alongside neobank N26 who announced today another $170m raise. What did Matt, Remitly's CEO share with me?
On raising $135m equity
It's all about expanding into key markets and developing new products...
...which means new financial services ahead.
What are the other pain points Matt identifies beyond remittances: Anything from insuring against specific risks of immigrants, lending without a credit history and getting bank accounts, all without the history and documentation that standard banking requires. We'd expect to see a very focused roll-out of the first of these products by Remitly, likely to one or two segments just to begin with.
Instant payment still needs working capital
Many companies, especially in the blockchain space, are trying to remove the need to pre-fund. But as Matt says, the devil is in the detail and as yet the solutions are not there for Remitly. Hence $85m for a credit line as part of the recent raise to ensure that instant transfers can be delivered, a key remittance product differentiator for Remitly.
Building trust is the cornerstone of the business
We talked a lot about the shifts from cash to digital and what it would take to move the many, many millions of customers over to digital. Technology (i.e. smart phones) are now effectively enabled and widely available - this wasn't the case 10 years ago. As customers increasingly trust using a mobile phone for financial services, that should enable the shift to digital, especially on the sending side. But, there is no silver bullet here.
On Facebook's Libra
The scarcity of details make it hard to draw too many lines but the even scarcer amount of information on the Calibra wallet is the really big unknown. Facebook will want people to use the wallet and pay in and out of their wallet. Matt's question - how will Facebook get money into the wallet?
My broader question - does the remittance customer actually want a [Facebook] wallet. Cash (both in and out) remains a fundamental requirement in the sector that is shifting but it's taking time.
We covered a lot of other ground the in the discussion and where Remitly has been successful to date. You can read Matt's insights in our report accessed below: