Currencycloud snags $80 million in funding as it looks to enter the Asian market
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Currencycloud, a London-based fintech that facilitates cross-border payments for businesses, has raised $80 million in a funding round co-led by Sapphire Ventures and Visa, reports CNBC.
The new capital takes Currencycloud's total raised to $140 million, with the startup's valuation reportedly hitting $220 million, per TechCrunch.
The startup has developed a set of APIs that enable banks, fintechs, and other financial businesses to process international transactions. To date, Currencycloud, which counts Visa, Monzo, and Revolut as major clients, has processed more than $50 million in cross-border payments.
Cross-border transfer volumes have seen a sharp rise in recent years - a boon for Currencycloud. Across the whole of 2018, global remittances reached $689 billion - an 8.8% spike on the $633 billion recorded in 2017, per World Bank data. Yet, much of the infrastructure underpinning this flow of money is inefficient and expensive.
A number of fintechs, most notably UK-based TransferWise, have sought to take advantage of this by leveraging technology to reduce the time and cost of international transfers for consumers. Currencycloud has taken a different approach: It's developed 85 APIs, covering areas like inbound money collection and foreign exchange, to resolve this challenge for banks and fintechs. As of the end of 2019, the startup's APIs were being used by 350 companies, Currencycloud CEO Mike Laven told TechCrunch.
To further build on its growth, it's now looking to expand into Asia to take advantage of the region's high rate of fintech adoption. Its largest market is currently Europe, but it's also been increasingly investing in building out its North American business, according to Laven, cited by CNBC.
The next phase of growth for the company is to expand into Asia as it looks to take advantage of widespread fintech adoption in countries like China: 87% of digital active consumers in China are defined as fintech adopters, 23 percentage points higher than the global average of 64%, per EY data.
Currencycloud's raise brings business-to-business (B2B) fintechs' impact into focus. In the first month of this year alone, we've seen some major B2B fintechs providing the tech plumbing for financial services hit the headlines. For instance, last week we reported on Sweden-based open banking fintech Tink's $100 million haul. And that news came on the back of the $5.3 billion deal Visa agreed to to acquire Tink's US-based peer Plaid.
These transactions demonstrate the growing willingness among financial institutions (FIs) like Visa to spend significant sums to tap into the established position fintechs like Currencycloud have built in today's digital economy.
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