London – Cross-border digital money transfer service WorldRemit aims to increase its customers fivefold to 10 million in 2020, with half of them in Africa, Chief Executive Ismail Ahmed said.
The London-based company enables its immigrant customer base to use digital financial remittances to bypass more expensive cash transfer options from the likes of Western Union (WU.N) and MoneyGram (MGI.O) to send money home to families and friends.
WorldRemit said on Thursday it aimed to achieve its aggressive growth target with $40 million in new funding from venture backers and after doubling revenue growth in the last two years, which has made it increasingly self-sufficient.
“The revenue we generate, the funding that we have received, together, gives us the war chest that we need to significantly expand our business,” Ahmed said in an interview. The Somaliland-born entrepreneur once worked as a United Nations adviser on money-laundering rules.
The funding round is led by emerging markets investor LeapFrog Investments, with backing from existing stakeholders Accel Partners and Technology Crossover Ventures (TCV). WorldRemit has raised $220 million since its founding in 2010.
WorldRemit is set to generate around 60 million pounds this year, up from 40 million pounds in 2016 and 27 million pounds in 2015, the founder said. “The revenues we generate allow us to self-finance the business.”
Ahmed said its strategy is to enable intra-African money transfers, helping its 1 million customers on the continent avoid some of the world’s most prohibitive cross-border bank transfer costs. For example, small business traders in Kenya might source inventory from Uganda or online shoppers in South Africa might pay for goods in Nigeria.
The company also is counting on surging growth in the United States, where it expects to generate up to 40 percent of revenue in coming years, compared to 14 percent, he said. Britain and Australia are now its largest revenue generators, each contributing 20 percent of overall revenue.
WorldRemit will reinvest potential profits to fuel rapid expansion, Ahmed said. “We could be profitable even today, if we wanted to, but we are investing in growth.”
The company is reaching the crossover point where it can finance itself from cash flows, and is gearing up to go public in the next few years, he said.
“I think the business is mature. We have reached the stage where we could be a candidate for an IPO (initial public offering),” Ahmed said. “Not 2018. We haven’t put a date on it.”
Reporting by Eric Auchard; Editing by Richard Chang