LemFi has raised $33 million in Series A funding to streamline remittance payments for immigrants globally. Left Lane Capital led the round. Y-Combinator, Zrosk, Global Founders Capital, and Olive Tree were some of the additional investors.
To work, study, or settle permanently, thousands of people relocate each year to Europe, Canada, and the United States. Ridwan Olalere and Rian Cochran thought it was time to launch their mobile remittance service in 2020, the year that worldwide travel decreased as a result of the epidemic.
The service would provide immediate international transfers to the African diaspora community in Canada. It was originally known as Lemonade Finance, now abbreviated to LemFi. Sending money home before LemFi required combining several payment or money transfer providers, with fees of up to 8% of the transaction.
LemFi started in Canada and quickly spread, reaching the UK by 2021. According to the UK government’s ethnicity facts and figures research, 1.4 million people in England and Wales (or about 2.5% of the population) are believed to be of African descent.
The business was also seeking to expand the list of African nations from which consumers may transfer or receive money. It had added 10 new African remittance corridors by the end of 2021. LemFi now intends to provide immigrants from developing market nations with easier, fee-free money transactions.
LemFi does not provide lending (to generate interest on user deposits as a bank would) since its UK license only authorizes building wallets and holding user monies.
According to Cochran, LemFI believes that its services were necessary in North America or Europe. He noted that there was already a lot of rivalry in Africa for what it intended to achieve,.
“We looked from a global perspective and said, ‘Look, there’s still a lot of opportunity to build something, either for Africans now living abroad, or really just generally speaking immigrant communities that are similar to do those Africans living abroad that need the same products and services.’” Cochran says. The company is now preparing to acquire EU licenses to bring its services to migrant workers and families in the European Union.
Immigrants deal with a number of common issues regardless of where they are from. One significant issue is that migrants often experience stress and overwhelm as a result of their new homes’ financial systems. And one of their struggles is sending money home. Globally, migrant remittances totaled $626 billion in 2022.