LemFi Secures $53 Million to Enhance Remittance Reach in Europe and Asia

LemFi, a London-based financial services platform aimed at serving immigrants has recently secured $53 million in funding, which it plans to utilize for customer acquisition and expanding its operations into additional countries.

For numerous emerging market economies, remittances have emerged as a crucial financial resource. According to World Bank data, these inflows exceeded $669 billion in 2023, constituting substantial portions of GDP in these nations, often surpassing foreign direct investment in terms of foreign exchange sources.

The remittance market remains largely dominated by traditional banks and agents, who command over 60% of the market share despite increasing competition from technology startups. Notable challengers like Remitly have transitioned to public trading, while others, such as Zepz and Taptap Send, stay privately held, all competing for the remaining market segments.

Among the newer entrants is LemFi, a London-based financial services platform aimed at serving immigrants. The company recently secured $53 million in funding, which it plans to utilize for customer acquisition and expanding its operations into additional countries. Since its inception in 2020, LemFi has rapidly grown by enabling diaspora communities in North America and, more recently, Europe, to transfer money to developing markets in Africa, Asia, and Latin America. The fintech now has over 1 million active users who depend on its multi-currency accounts to send funds to their families and friends in countries including Nigeria, Kenya, India, China, Pakistan, and 15 others.

Recently, LemFi extended its reach in Europe by collaborating with embedded finance provider Modulr. This partnership will facilitate LemFi’s initial operations until it secures a regulatory license next month following the acquisition of a firm based in the Republic of Ireland. With these developments, LemFi has expanded its operations to encompass 27 sending markets and 20 receiving countries.

A key factor in the company’s growth has been its rigorous fraud detection measures. Reports indicate that individuals sending money abroad are nearly four times more likely to fall victim to financial fraud than those who do not. LemFi’s co-founder and CEO, Ridwan Olalere, explained, “Fraud can significantly drive up costs. When costs rise, they often translate into additional fees for customers. We’ve effectively kept our fraud rate very low, enabling us to provide the most competitive pricing possible to our users.”

Olalere noted that this focus on security, alongside an excellent user experience, has helped the company build a strong reputation within specific communities, driving referrals and further enhancing its competitive edge. Approximately 70% of LemFi’s earliest users remain active on the platform, with 60% engaging yearly.

In an update regarding LemFi’s expansion into Asia and its overall strategy shared last April, Olalere indicated that the fintech recorded over $2 billion in annual transaction volume in 2023. As of the latest update, the platform is now processing $1 billion in monthly transaction volume. Olalere attributes this impressive increase to robust user adoption in the Asian corridor, which currently generates $160 million in monthly total payment volume and is expanding at a remarkable rate of 30% month-over-month within its first operational year.

Olalere also highlighted that LemFi has seen a doubling of its users, revenue, and transaction volume over the past two years, contributing to rising interest from investors. This growth momentum culminated in a Series B funding round led by Highland Europe, a growth-stage investment firm based in London that supports startups generating over €10 million in annual revenues.

According to Olalere, the funding round was completed in just four months and included participation from existing investors such as Left Lane Capital, Palm Drive Capital, and Y Combinator, alongside new backers like Endeavor Catalyst. This brings LemFi’s total funding to $85 million.

LemFi aims to use the latest funding to broaden its services, enhance its payment network licenses and partnerships for localized offerings, and recruit talent for its forthcoming growth phase. Currently, the company boasts over 300 employees across Europe, North America, Africa, and Asia.

“Although regulatory landscapes are complex and necessitate engagement with multiple stakeholders on a market-by-market basis, scaling has become significantly easier for us due to our adaptable technology,” Olalere noted. “Our objective is to penetrate as many markets as possible with substantial immigrant populations, commencing with Europe this year, which will be a focal point for our efforts moving forward.”