Seattle-based Beamit announced a round of $2.4 million in equity financing this week, from investors including Bezo Expeditions, TomorrowVentures, and Eric Schmidt, among others. The startup intends to bring new life to what its founder and CEO Matt Oppenheimer sees as a stagnant, dated industry: international remittance.
International remittance, or sending money home from abroad, is an industry that hasn’t kept pace with technology, according to Oppenheimer. He told BetaKit that the need became apparent in his own work for Barclays, where he used to oversee mobile and internet banking in Kenya. “I was living in Nairobi, and through that experience, and through a lot of travels during the years, I realized that sending money home is a huge pain, is very very expensive, and really hasn’t leveraged digital technologies like a lot of other industries have,” he said.
Unlike a lot of other mobile banking processes, Oppenheimer said that remittances from one country to another are overwhelmingly done via in-person cash transactions, at banks or using chains like Western Union, and can incur significant fees. In an emailed press release, Beamit notes that the average cost of a $300 transfer is $27, or 9.3 percent. In the Phillipines, where Beamit is currently testing its product on a limited basis, Oppenheimer says the cost is around 7 percent, which works out to about $21 for a $300 transaction, and he told BetaKit that Beamit is aiming for a target price of “less than half” that.
When asked about how Beamit does what it does, Oppenheimer wouldn’t reveal much, saying that the company is keeping the mechanics of its product under wraps until launch, which he estimates will happen “at some point this year.” He did however explain in broad strokes what Beamit does for customers.
“A customer gets online, and can enter in basic information they need to to complete the transfer,” he said. “Then money is sent from their U.S. account, to their relatives (usually) in their home country.” The idea is simple, but the process is not, because of the tricky issue of having to navigate banking rules, regulations and laws in each of the international destinations Beamit is targeting.
Oppenheimer said building his team has been a careful balance of managing those requirements, as well as bringing on strong product people, which is why he brought on Josh Hug, former co-founder of Shelfari, a community-powered book discovery site and knowledge base which Amazon bought in 2008. “That partnership with Josh is what I think our investors saw when they decided to make this most recent investment.”
Beamit won’t be alone in its efforts to make transferring money internationally less of a hassle; startup TransferWise saw $13.4 million pass through its system in its first year of operation, which currently supports exchanges between euros and British pounds. The company plans to expand to other currencies, but isn’t really focused on remittance from first-generation immigrants and expats to family back home the way Beamit is.
Until the public gets a good look at what Beamit’s offering, it’ll be hard to judge just how much potential it has. But backing from big name investors is a good sign that it’s thinking about the problem of international remittances in the right way.
