For many emerging market economies, remittances have become a lifeline. Inflows are expected to exceed $669 billion by 2023, according to World Bank research, and now represent an important part of the country’s GDP, often surpassing foreign direct investment as the main source of foreign exchange. Traditional banks and agents maintain a strong grip on the remittance market, with over 60% market share despite fierce competition from new technological challengers. Some of these challengers, like Remitly, have gone public, while others, like Zepz and Taptap Send, remain privately held – all competing for the remaining share. LemFi, a London-based financial services platform designed for immigrants, is one of the new players. It is now armed with $53 million in new funding, which will be used to fuel efforts to acquire more customers and further expand into other countries. Since its launch in 2020, LemFi has experienced rapid growth by helping diaspora communities in North America and, more recently, Europe, send money to emerging markets throughout Africa, Asia, and Latin America. The four-year-old fintech has more than one million active users who rely on multi-currency accounts to send money to friends and family in countries like Nigeria, Kenya, India, China, Pakistan, and 15 others. Last week, the company expanded into Europe by partnering with embedded finance provider Modulr. This partnership will help LemFi start operations until it gets its license next month after acquiring the Republic of Ireland-based company. With this move, LemFi-whose income comes from transaction fees and foreign exchange spreads-now operates in 27 remittance markets and 20 remittance countries. One way companies gain traction is through aggressive fraud detection. One recent report says that people who send money abroad are almost four times more likely to be victims of financial fraud than those who don’t. “Fraud can cause costs. Higher costs often mean passing on to customers through additional costs. We have been able to maintain the lowest level of fraud, in order to offer customers the best prices,” said LemFi founder and CEO Ridwan Olere, who founded LemFi with CFO Rian Cochran after the duo met at fintech unicorn OPay, he said. TechCrunch in an interview. “So, we have created a brand and a reputation in a certain community because of that, as well as the user experience, which makes customers refer to friends. That helps us differentiate and grow faster than expected in a competitive market. About 70% of the most customers early LemFi still uses the platform, while 60% of its annual active customer base. When we reported on LemFi’s expansion into Asia and its broader strategy last April, Olalere said the fintech recorded more than $2 billion in annual transaction volume in 2023. Fast forward to now, and the remittance platform is processing half of the – $1 billion – monthly payment volume, Olalere told TechCrunch. He attributed this surge to strong adoption in the Asian corridor, which earned $160 million in TPV per month and grew 30% per month in the first year of launch.Olalere also showed that the company doubled its users, revenue, and transactions in the past two years, and played a role in attracting investor interest and confidence. This growth momentum led to a Series B round led by Highland Europe, a London-based growth-stage investment firm that supports startups with annual revenues of more than €10 million. The round, which, according to Olalere, was closed for just four months, also saw the participation of existing investors Endeavor Catalyst, Left Lane Capital, Palm Drive Capital, and Y Combinator, bringing LemFi’s total funding to $85 million. LemFi will use the funding to extend its offering, scale payment network licenses and partnerships to provide hyper-local services, and recruit talent for the next phase of growth. The company currently has more than 300 employees in Europe, North America, Africa, and Asia. “While market-by-market regulation remains complex and we have more stakeholders to deal with, scaling has become easier for us because we have adaptable technology and can easily plug and play into different payment methods and schemes,” he said. Olalere. “So, we are going to a lot of markets because there are a lot of immigrants, starting from now with Europe this year, which will be the main focus for us.”
