Azimo, a U.K. online money transfer business aimed at making it cheaper to send cash around the world, has raised $15 million led by Japanese e-commerce giant Rakuten as the start-up looks to expand its presence in Asia.
The funding round brings Azimo's total amount raised to $40 million to-date. Existing investors eVentures, Frog Capital, Greycroft, Accion and MCI also contributed to this round of funding.
At its last round in June 2015, the company was valued at $100 million, according to several media reports. Michael Kent, chief executive and founder of the start-up, said that this was "not far off" and the latest round is a "big uplift" on that valuation, but could not disclose the actual figure.
Azimo allows users to transfer money around the world in over 80 currencies at a rate it claims is cheaper than some banks and other established rivals. The receiver can get that money through different methods from a simple bank transfer to picking up physical cash or having it delivered to their mobile wallet, banking services that can be done via simple text messages.
$600B market
The investment by Rakuten, which has been called the "Amazon of Japan," will help Azimo establish a larger presence in Asia. The British start-up already allows its customers to send money to Asia and it wants to improve that process and, more crucially, take advantage of the growing number of migrants in Asia wishing to send money back home.
"What you have in Asia is a very mobile-literate region with high Android penetration. We're addressing lots of people within Asia travelling cross-border who don't have many options to send money," Kent told CNBC in a phone interview.
The investment is going to be used on establishing an office in either Hong Kong, Singapore or Japan and "working through the finer details with regulators", Kent added.
International migrants will send $601 billion to their families in other countries this year, with developing countries receiving $441 billion of that, according to the World Bank. And more data from the organization shows that outflows from countries such as India, China and Bangladesh are on the rise, a trend Azimo is hoping to capitalize on. These countries have traditionally been countries that receive large inflows.
The average cost of sending remittances is about 7.68 percent of the overall transaction. Azimo is just one company aiming to cut its charges, putting it up against traditional players, with the likes of WorldRemit, which recently received a $45 million investment, and TransferWise.
Azimo said it is different because it's focusing on outflows from other regions in the world.
"We are trying to build something that can point to different parts of the world more easily than they can. We are deeper in Europe. WorldRemit's focus is the U.S., U.K. and Australia. We are focused on the big markets in Europe," Kent said.
Social media transfers?
Azimo marks Rakuten's latest investment. The Japanese firm runs the country's largest e-commerce site as well as a number of financial services. It also owns the messaging app Viber which it bought in 2014 for $900 million.
The strategic investment will help Azimo leverage Rakuten's marketing and regulatory expertise in Asia, but also points towards the start-ups ambition to integrate into social networks.
Azimo is already integrated with Facebook to allow friends to send money to one another via the social networking app. The start-up said it is talking to a number of social media companies and Rakuten's Viber could be an interesting proposition.
"We can see that as the world increasingly uses WhatsApp and Viber, we think money transfer will be an obvious use case of expanding those services," Kent told CNBC.
"It should be easy to send Azimo money as it is sending message. I would be surprised if we are not deployed (with social media integration) within the next 12 months."
