Taptap Send, an app that lets people send money back home to Africa and Asia instantly for free has raised a $13.4 million Series A to support its service expansion.
The Series A was co-led by Canaan Partners and LinkedIn co-founder, Reid Hoffman, along with participation from other unnamed investors.
The startup was founded in 2018 by Michael Faye, a development economist, and former United Nations official.
Global remittances account for over $500 billion annually, most of which move back into developing countries. But the market is dominated by traditional services that are expensive, can take days to arrive, and have limited reach in rural areas. Taptap Send is helping people to send money instantly and securely for free. In doing so, they are working on making the UN Sustainable Development Goal of bringing cross-border remittance costs down by 2030 a reality today.
The 15 receiver countries Taptap Send supports payments into are predominantly African – including Senegal, Mali, Guinea, Ghana, Cameroon, the Ivory Coast, Kenya, Madagascar, Zambia, DR Congo, Morocco, and the Republic of Congo. The startup plans to add more countries with the new funding.
According to TechCrunch, the company’s business model works by charging no commission or any other fees for transfers, instead of making a cut on foreign exchange. It has built its whole tech stack from the ground up and says that this lets it pass on lower exchange rates to its customers, typically lower than others that might be serving the same markets. On top of this, there is an economy of scale principle at play here: having better rates will drive more users, which in turn might not mean better margins but a higher volume of transacting and more returns overall.
What they are saying
Brendan Dickinson, a general partner at Canaan said “The company has a nuanced, yet powerful strategy that Michael has put into place to allow [it] to be the lowest-cost provider in every market they enter. As the world rapidly shifts toward digital wallets and e-money, it creates an opportunity for remittance companies to create an even more magical experience by sending funds directly to those wallets.
Taptap Send gives as much of cost savings as possible to the customer, and as a result, is almost always the cheapest player in the market. All of that makes it economically viable to send smaller remittances – and in doing so, expands the total market and volume of remittances sent. This approach is strongly resonating with customers, as Taptap Send’s massive growth has been 90+% organic.”
