For Precious Edokpolor, a Nigerian working in Germany, the simple act of wiring money back home was a daunting and costly task. Rewire, an Israeli fintech startup, has set out to solve the cross-border financial problems of Edokplor and tens of millions of other migrant workers like her with an app tailored to their unique financial needs.
The company, with offices in Tel Aviv and Amsterdam, has just wound up a $25 million funding round. Yahoo co-founder Jerry Yang is numbered among its investors, as is banking giant Standard Bank of South Africa. Rewire was one of only 10 Israeli companies selected to join Google’s prestigious Startup Growth Lab in 2022.
“If you look at the financial services across the globe, there are so many great ways to disrupt,” Yang says. “Everything from buy now, pay later, using deep data to do credit, this idea of opening and liberating a whole segment of participants in the financial world.”
For Edokpolor, Rewire’s attractions were its low rates and the ability to easily open an account. “All you need is a valid passport,” she says. “With that you can open a free online bank account and get a free debit card. Zero. 0%. Amazing.”
Rewire’s 600,000 registered users – centered mostly in China, India, Thailand, the Philippines and Nigeria – transferred about $1 billion in over 1 million transactions last year. The company expects to double those numbers annually and reach a valuation of more than $1 billion within three years.
“The platform already supports tens of thousands of transactions monthly and can easily scale to hundreds of millions as the market grows, without compromising performance. Rewire is ready for massive growth,” says Ardoram Gaash, managing director at Israeli venture capital firm Moneta Capital, which has invested in the company.
The world’s estimated 270 million migrant workers send about $600 billion back home annually. But moving the money within the traditional banking system can be difficult and expensive.
Banks require minimum balances, verifiable addresses, credit histories and other documentation that many migrants cannot provide. Language and culture can be barriers, and many migrants also work in remote locations, making in-person banking a problem.
The fully digitized Rewire sweeps these hurdles aside. It provides a free debit card with no annual fees, no ATM withdrawal charges and attractive exchange rates. An international transaction can be completed within two to three hours, compared to two to three days via the traditional banking system.
“Rewire offers better service and better tools for money transfers, at half the cost and with more integrity than any other company,” says Snapir Chayat, CEO of Israel-based Imagen Cards, which offers a prepaid Mastercard to Rewire subscribers.
CEO Guy Kashtan is also looking toward offering the migrant worker community a bigger array of financial services including insurance, credit, and cash deposits and withdrawals.
Why can Rewire do what traditional lenders cannot?
“This sector is a small piece of brick-and-mortar banks’ business, so they want to avoid the risk,” Kashtan says. “Migrants are our main business, so it’s worth our time and effort to manage that risk.”
That approach is paying off for its users.
“The most important benefit of Rewire is the rate. It’s the lowest in the market most of the time,” says Ishita Roy, an Indian student in Rome. The second is speed.
“The money reaches my Indian account in less than a minute,” Roy says. “But the best part that no other money transfer app gives is the Facebook community that gives you advice on your personal finances.”
For Kashtan, the ability to service a segment of the population that had been financially marginalized has yielded an unexpected benefit.
“Sure, at the start we saw a good business opportunity within a growing market sector. But quickly enough we realized that there’s an even bigger opportunity – to actually help people from developing countries and include them in the financial systems,’’ he says. “We call it our ‘double bottom line’ of financial profit and doing social good.”
Rewire is raising an investment round via the OurCrowd platform. For more information, click HERE.