Zepz, the global money transfer company previously known as WorldRemit, has successfully raised $267 million in new funding from both existing and new investors. This investment round, led by venture capital firm Accel, signals a renewed interest in established fintech companies and aims to fuel Zepz’s continued expansion in Africa and other key markets. The firm has put plans for an initial public offering (IPO) on hold as it focuses on growth and profitability in the highly competitive remittance sector.

Strong Support from Investors

In this latest funding round, Zepz attracted support from prominent investors, including Leapfrog, TCV, and Coller Capital. The International Financial Corporation (IFC), part of the World Bank Group, also pledged up to $20 million, underscoring the development potential of Zepz's business model, particularly in emerging markets.

Accel, which has been involved with WorldRemit since its early stages, continues to view remittances as a lucrative and underdeveloped industry, with significant room for digital transformation. Harry Nelis, a partner at Accel, noted that the remittance industry remains highly fragmented, presenting opportunities for Zepz to not only expand its market share but also acquire smaller firms looking to shift from traditional cash transfers to digital platforms.

Post-Pandemic Growth Trajectory

Founded in 2010 by Somali-born entrepreneur Ismail Ahmed, Zepz started as a solution to the high transaction fees often associated with sending money across borders, especially in developing regions like East Africa. WorldRemit, the company’s original name, grew rapidly by offering affordable and convenient digital money transfers, and in 2021, it acquired Sendwave, a cross-border payment company. Following the acquisition, the combined company rebranded as Zepz.

Despite the global economic slowdown and challenges in the fintech sector, Zepz achieved full-year profitability in 2022. Its steady performance is attributed to increased demand for digital remittances during times of crisis. According to Zepz CEO Mark Lenhard, geopolitical unrest, natural disasters, and other global disruptions have driven people to send more money back home to support their families, reinforcing the importance of remittance services.

"We certainly saw it during Covid. We’ll see it when there’s an earthquake. We’ll see it when there’s geopolitical unrest," Lenhard said in a recent interview. "More money will flow in because people get concerned about their families and communities during these times of need."

No Immediate IPO Plans

Although Zepz has achieved profitability and continues to attract investor interest, the company has shelved plans for an IPO. According to Bloomberg, investors like Accel are "in no rush" to see Zepz go public, as the focus remains on consolidating its position in the market and further scaling its services. The firm was last valued at $5 billion in 2021, and while the company has not disclosed its current valuation, this latest funding round highlights the strong confidence investors have in Zepz's long-term potential.

The decision to delay the IPO also reflects broader trends in the fintech industry. Over the past two years, valuations for fintech companies have experienced a downturn after reaching record highs in the wake of the pandemic. However, the recent resurgence of funding in established firms like Zepz and Monzo Bank indicates renewed optimism in the sector. Monzo raised funds at a $5.2 billion valuation, while Revolut managed to increase its valuation to $45 billion through a secondary share sale.

Future Growth Prospects

The capital infusion from this funding round will allow Zepz to focus on expanding its services across Africa and other key markets where access to digital remittance platforms is growing in importance. The company is also exploring potential acquisitions of smaller firms, enabling it to capitalize on the ongoing shift from traditional money transfers to online services.

Zepz’s commitment to innovation and digital inclusion has made it a key player in facilitating financial connectivity for millions of people around the world, particularly in regions with limited access to traditional banking infrastructure. The company’s platform allows users to send money from over 50 countries to more than 130 destinations worldwide, providing a critical lifeline for many families and communities.

In the long term, Zepz aims to build on its success by continuing to streamline cross-border payments and offer affordable services that address the unique needs of its diverse customer base. With a strong foundation and the backing of major investors, Zepz is well-positioned to navigate the challenges of the fintech landscape and strengthen its market leadership.

Zepz’s $267 million fundraise marks a pivotal moment for the company as it embarks on its next phase of growth. With strong support from prominent venture capital firms and development institutions like the IFC, Zepz is set to expand its footprint in Africa and other emerging markets, driving digital transformation in the global remittance industry. As the company continues to innovate and address the evolving needs of its customers, Zepz remains committed to making cross-border money transfers faster, more accessible, and more affordable for users worldwide.