People used fintech app WorldRemit to send cash overseas 3.5 million times last year

Mobile money transfer service WorldRemit saw a big jump in its number of transfers over its network last year, with 3.5 million transfers using its app compared to 1.9 million in 2014.

CEO and founder Ismail Ahmed told Business Insider that the average transaction size remained steady around £200 ($261) too.

WorldRemit's revenues jumped from £15.1 million in 2014 to £26.9 million, according to accounts filed with Companies House.

But a big marketing spend - WorldRemit's biggest administrative expense - pushed the company to a loss of £18.1 million, up from £10.1 million the year earlier.

London-based WorldRemit, founded in 2010, spent £15.4 million on customer acquisition and advertising, the accounts show.

WorldRemit's big marketing budget comes shortly after TransferWise, a rival online money transfer service, disclosed its advertising spending for the first time. Like WorldRemit, TransferWise's £12.3 million marketing spend was its biggest single expense.

The figures underline how competitive the foreign exchange market is. Both WorldRemit and TransferWise are two of London's hottest fintech startups - valued at $500 million and $1.1 billion respectively - but have had to spend big to keep up growth. They face competition both from newer startups and traditional big players such as Western Union and MoneyGram who are muscling into online transfers.

Explaining the marketing spend, WorldRemit founder and CEO Ismail Ahmed told BI: "We had a lot of partnerships last year. For us, we have to sign partnerships in each receive market, do an API. If you take the Philippines, we have 10 partners. With each, we have to do co-marketing. We have to spend on marketing and increase our brand awareness particularly on the receive side."

WorldRemit has 35 partnerships with mobile wallet providers across 26 countries, Ahmed says. WorldRemit specialises letting customers send money to mobiles either as prepaid credit or a virtual store of value on the device.

Ahmed added: "We have got a very strong unit economics which supports the level of marketing spend we had in 2015. It means we have predictable and recurring transactions. It is a relational business rather than a transactional business. We have a very high customer retention rate.

"We're still generating roughly the same revenue from the customers we acquired in, say, 2012. What that means is if today we zero our marketing spend we would still generate the same revenue because of our brand awareness and grow our customer base, albeit at a slower pace."

WorldRemit specialises in the remittance market, where migrants and immigrants sent money back to family and friends at home. Globally, the remittance market is worth close to $600 billion.

Ahmed said WorldRemit would is targeting revenues of £42 million this year but is unlikely to turn a profit. He says: "We're still investing for growth but our operating costs as a percentage of revenues has significantly come down. Our operating expenses are likely to be 15-20% up on last year, compared to more than 50% growth in revenues.

"We're now seeing the fruits of that investment in mobile money, particularly with our mobile money partners. The cost of acquiring customers was 60% lower in the first half of 2016 compared to the same period last year. Our marketing spend will be less this year and we've acquired a lot more customers than we did in 2015."

He added: "In 2014 our gross margin was 54%, in 2015 it was 60%. All the numbers are trending in the right way."

WorldRemit's accounts also show:

• The UK and Europe accounted are its biggest markets to send money from, followed by Australia and then Canada;
• WorldRemit has 188 staff and spent £9.7 million on wage and social security costs last year;
• The highest paid director, unnamed, was paid £150,000.