Fintech
Pesa unlocks new markets to keep remittances flowing to emerging economies
Founders of WeighsA fintech that focuses on remittances, knows how expensive, inaccessible and unreliable remittance services push people to opt for risky informal channels, such as WhatsApp groups, to transfer money.
Their first-hand experience using informal channels and their awareness of how widespread their use was among Africans living in the diaspora after settling in Canada in 2017, inspired Tolulope Osho, Yusuf Yakubu and Adewale Afolabi, all Nigerians, to innovate responsive remittance products in late 2021, initially targeting the remittance market from Canada to Africa, but now also targeting global activity.
Their determination comes at a time when remittances to low- and middle-income countries (LMICs) are reported increase by 38% over the last six years, reaching $656 billion by the end of 2023.
The World Bank estimates a further climb in 2024 and 2025 against the growing demand for fast, convenient and reliable cross-border remittance services. Digital remittance tools, the World Bank notes, will continue to accelerate remittance activities by reducing transaction costs and increasing access to formal money transfer channels.
Pesa’s goal from the beginning was to allow users to send money in the “safest and fastest way possible” and to “remove the boundaries around money,” Osho, the startup’s CEO, told TechCrunch.
The channel was created as a multi-currency wallet that allows users to send, receive, and hold multiple currencies (six for now).
“The way we are looking at remittances is that you should continue to transact when you move to a new country; if I leave Nigeria for Canada, there should be no kind of disruption in transmission compared to how I see financial services. I should be able to transact at home as if I had never left,” Osho said.
“With our multi-currency wallet, when you travel between these countries (Nigeria, Canada, EU, US, UK and Ghana) you can take your money with you as if it were in your wallet,” he said.
Pesa pursues global expansion
The fintech is in the final stages of acquiring the licenses needed to launch in the United States, having just launched in 27 European countries. Pesa also has a presence in the United Kingdom, through a partnership, in the meantime, while it works to acquire an Electronic Money Institution (EMI) license, which Osho says will give it the full functionality of a bank. The license will allow it to offer cheaper services, issue and hold electronic money on behalf of customers, and create more products for its users.
Pesa’s efforts to increase coverage will allow its users in these regions to send money to its five African markets, including Nigeria and Ghana, and India, which it entered last March. The launch in India was a chess move that would facilitate forays around the world first destination of remittances: the country received $120 billion last year, with a projected increase to $129 billion in 2025. India is also the greater origin of migrants globally. Meanwhile, Pesa is ramping up its service in sub-Saharan Africa, which recently reached $54 billion, supported by major recipients such as Nigeria and Kenya.
Its continued expansion bid will intensify competition for other companies in the digital remittance sector, including Tanzania’s Nala, which recently raised $40 million in a Series A roundLeatherback, Send by Flutterwave, LemFi, Eversend and established entities such as Wise and Zepz.
And as it pursues global growth, Pesa, part of Fast Forward Venture Study The current cohort, which has largely been self-funded in its takeoff, has made great strides, including reaching profitability in less than two years of operation. It has so far processed over a million transactions worth $380 million, and has 60,000 users, 30% of which are active.
The team is very optimistic about the impact on new markets and products such as the planned multi-currency cards.
“We are looking to grow by completing our expansion and integrations in all the continents we are expanding to,” Yakubu said. “We will then generate more revenue than we do today.”