Western Union competitor WorldRemit is targeting its first profit next year
- CEO Ismail Ahmed told CNBC that he believes WorldRemit will reach profitability by next year.
- The company raised $40 million in a venture capital round that brought total funding to $220 million last year.
- Ahmed said that the business is highly focused on Africa, with half of customers based in the continent.
Money transfer start-up WorldRemit expects to turn a profit in 2019, its chief executive said Tuesday.
Ismail Ahmed told CNBC that, despite the firm's heavy investment in partnerships and user acquisition, he believes it will reach profitability by next year.
"Even with the amount of investment we're making in customer acquisition and branding, we are targeting to achieve profitability next year," Ahmed said in a phone call.
"We're talking about an acceleration of growth here now. We're investing heavily in partnerships within Africa and Latin America."
London-based WorldRemit disclosed in September last year that it had turned cash flow positive for the first time in 2016. It remained loss-making but narrowed losses from £19.4 million ($27.5 million) in 2015 to £15.3 million in 2016, according to accounts filed with U.K. business registrar Companies House.
WorldRemit lets users send money to more than 140 countries through its app. The company raised $40 million in a venture capital round that brought total funding to $220 million last year. The investment reportedly helped WorldRemit notch a valuation of $670 million.
The firm wants to increase the number of customers signed up to its platform to 10 million in 2020. Ahmed said that the business is highly focused on Africa, with half of customers based in the continent.
It lists U.S. money transfer giants Western Union and MoneyGram among its competitors, as well as U.K. fintech (financial technology) start-up Transferwise.
WorldRemit is also targeting an eventual initial public offering (IPO); however, it has not set a date for the listing yet.
Ahmed said: "I think we've built a truly independent business that can IPO. We're hoping to go public in the next few years."
The firm is especially focused on the remittances sector. It partnered with telecommunications firm Lebara, which offers pay-as-you-go SIM cards targeted at migrant communities. The deal will enable Lebara users to access WorldRemit's service through the Lebara app and website.