Global money transfer has been a multi-billion dollar industry for decades, with transfers often equal to or exceeding the value of the main exports of some countries. Market watchers have long expected Stockholm-listed Vostock Emerging Finance (VEF), an active FinTech investor, to enter the market. That expectation was fulfilled with the announcement earlier this week that VEF has taken a $3.4 million stake in TransferGo, through a Series A round of investment.
The announcement was also noted for its timing as the information came on the heels of the Brexit vote in the UK. The Brexit vote resulted in market selloffs worldwide. While virtually no financial institution emerged unscathed, the impact on UK banks and financial institutions was particularly dramatic.
Due to its “local in, local out” business model, the short and long-term impact on TransferGo was minimal. “We are very proud and happy that despite Brexit and the huge market volatility, we’ve managed to serve our customers without any friction last week,” TransferGo CEO Daumantas Dvilinskas said in a statement.
“VEF’s Fintech focus and long-term approach in building great lasting financial institutions is an exact match with the business philosophy here at TransferGo. Therefore, we believe that this collaboration is an important step for TransferGo en route to becoming a global Fintech brand,” he said.
London-headquartered, Lithuanian-founded TransferGo was launched in 2013 with the expressed goal of providing an inexpensive and convenient money transfer option for migrant workers looking to send money back home. TransferGo has attracted more the 160,000 customers who send over $17 million monthly. A growing number of small and medium sized businesses have also been drawn to TransferGo.
Part of the new investment is earmarked for the development of an Android application.
“Global money transfer and its disruption is one of the clearest Fintech themes we have been looking to invest in since VEF was founded,” said VEF managing director Dave Nangle. “We have been waiting patiently for our entry point and are very excited to announce our investment into TransferGo today, one of the industry’s fastest growth players. The team has an excellent track record of focus and delivery in the valuable and growing European corridors by delivering a better, quicker, cheaper product than key peers.”