Remittances — the business of money transfers — is a fragmented and huge market, currently estimated to be worth some $25 trillion annually. Now, one of the more interesting startups in the field — which combines “alternative” financial rails like the blockchain with more traditional bank rails to provide faster and cheaper remittance services for small and medium businesses (think Venmo for SMBs) — has raised a new round of funding and is rebranding as it gears up to claim a bigger stake in the field.
Align Commerce, which today is rebranding to Veem, is today announcing that it has raised a $24 million round led by strategic investor National Australia Bank (NAB) Ventures, with participation also from GV (Google Ventures), Softbank’s SBI Investment Co., Ltd., Kleiner Perkins Caufield Byers and Silicon Valley Bank.
Veem plans to use the funds expand into more countries and add new products. The startup is currently active in 60 countries (you can see the full list of where money can be sent and received here), and makes revenues on a flat $15 receiving fee (it’s free to send); and foreign exchange rates.
NAB, GV and SBI are all new investors in the company, which has to date now raised over $40 million and counts Boost VC and more among other existing backers.
There are a very large number of businesses offering remittance services in the market today, with startups like WorldRemit, Remitly, Azimo and more taking on the likes of Western Union, Moneygram and PayPal (which owns Venmo), each covering slightly different scenarios involving different countries, payment channels and demographics.
The specific focus for Veem — which was founded by Marwan Forzley, a former executive at Western Union — is SMBs across international borders, an interesting one for a couple of reasons.
For one, it taps into a gap in the market: small and medium enterprises have largely lost out compared to consumers and large enterprises when it comes to tech innovations, particularly in the financial world — too specific in their business needs to use consumer services; too small to be able to afford services built for larger companies.
“At Veem, we understand even ‘mom and pop’ businesses must embrace globalization to compete with incumbents, grow their businesses and innovate,” said Forzley in a statement. “Unfortunately, the current international payments experience is fundamentally broken, stifling SMBs’ globalization efforts. Our platform creates an experience that is simple and frictionless, allowing businesses to easily Veem payments, data and invoices across the globe.”
“Paying international suppliers/partners is complicated, particularly for small & midsize businesses,” said Karim Faris, general partner, GV, in a statement. “Veem is in a great position to simplify global payments. The team has deep experience in this space and has taken a smart technical approach to the problem. They’ve successfully reduced the process required to reliably move money around the world to a few steps.”
(Veem is not the only one capitalizing on this: Square was built with SMEs in mind who found traditional card-charging equipment and services too expensive; Kabbage focuses on lending only to SMBs, knowing that they have often found banks too difficult to deal with.)
But what also makes Veem notable is how it’s transferring money: its service has been built on the idea of using “alternative rails” to help bring down pricing — originally using blockchain technology and Bitcoin, and these days combining blockchain with more traditional financial rails, which are compared and selected in real-time, depending on which will provide the best rates and most efficient transmission time at the moment of transfer.
It’s interesting to see a bank investing in Veem: it’s one more sign of how traditional and incumbent players in the financial industry are looking to smaller players for innovation, but also potentially as a customer: as Veem combines traditional financial rails with blockchain this could spell a business opportunity for NAB both as an infrastructure provider as well as a sales channel for its small business customers.
As part of this round, Melissa Widner, general partner, NAB Ventures, is joining Veem’s board.
“Many companies exist in a crowded international payments market today, but none have been able to distill the complexities of the space into an easy solution,” said Melissa Widner, general partner, NAB Ventures, in a statement. “Veem goes beyond the domain of foreign exchange-focused organizations and remittance companies by approaching global payments from a non-traditional point of view. This unique perspective has allowed for Veem’s growth and rapid expansion into global markets, and we expect their team and technology to continue to challenge the global payments status quo.”