WorldRemit Ltd., an online money-transfer service that lets people send cash across the globe, raised $40 million from Accel Partners to help the company take on Western Union Co. and MoneyGram International Inc.
Accel is the first institutional investor in the London-based company, which previously raised $7.5 million from individuals, said Chief Executive Officer Ismail Ahmed. Harry Nelis, a partner at Accel, will join the board.
WorldRemit was started in 2009 as a cheaper and faster way for migrants to send money using mobile phones, bank deposits or cash delivery. Unlike Western Union and MoneyGram, the company has no physical branches to fund and support, allowing migrants and expats from 34 countries to make payments to places without a banking infrastructure. Remittance payments globally reached $549 billion in 2013, according to the World Bank.
“The majority of these payments are still conducted via a network of physical locations, resulting in an inefficient and expensive user experience,” WorldRemit said today in a statement.
To grab a bigger piece of the market, WorldRemit said it plans to quadruple its staff to 200 by the end of the year.
Ahmed, a native of Somalia, founded the company five years ago at London Business School. He previously worked for the Union Nations Development Program.