Yahoo Finance Spotify Investor TCV To Buy WorldRemit Stake
One of the world's leading technology investors is in talks to acquire a stake in WorldRemit, one of an emerging breed of money-transfer companies competing with sector stalwarts such as Western Union.
Sky News can reveal that Technology Crossover Ventures (TCV), a shareholder in businesses such as Spotify, the music-streaming service, is to plough tens of millions of pounds into WorldRemit.
The transaction, which is said to be on the verge of being finalised, is expected to value London-based WorldRemit at $500m (£331m), according to insiders.
TCV is one of the prominent backers of technology companies, having participated in a recent funding round by Vice Media, and previously yielding a huge return from investments in Facebook (NasdaqGS: FB - news) .
Established in 2009, WorldRemit has struck partnerships with an array of international banks, mobile operators and mobile money transfer networks such as M-PESA, as well as local players to take advantage of the explosion in international money transfer activity.
It operates in more than 50 countries, including Fiji and South Africa, and this month signed a deal with MTN, the South African mobile network, to give it access to its 22m mobile money customers.
Focused on migrant remittances, WorldRemit has also benefited from the retrenchment of major banks such as Barclays (LSE: BARC.L - news) from money transfer activities in certain parts of the world amid increasing regulatory scrutiny.
The company said last year that it enabled more than 1.3m annualised remittance transactions and expected to continue its rapid growth throughout 2014.
Speaking last year when WorldRemit raised $40m from Accel Partners, another leading technology investor, Ismail Ahmed, the company's founder and chief executive, said:
"WorldRemit offers migrant workers and expats unparalleled speed, convenience and transparency when sending money home."
He said he expected the online money transfer sector to account for roughly 30% of the remittance market in the coming years.
"We offer the most extensive range of pay-out options unmatched by any money transfer firm, including payments to mobile wallets and international airtime top-up, which enable recipients to receive their money even where there is limited or no banking infrastructure," he added.
The sector is growing rapidly, with the World Bank publishing figures showing that $519bn of remittance payments were made in 2012, mostly through traditional players such as Western Union and MoneyGram.
Earlier this week, Transferwise, another operator in the industry, announced that it had raised nearly $60m from Andreessen Horowitz, another massive player in Silicon Valley.
WorldRemit and TCV declined to comment.
