Founders of Pesa, a remittance fintech, know too well how costly, inaccessible and unreliable remittance services drive people to opt for risky informal channels — like WhatsApp groups — to transfer money.
Their firsthand experience using informal channels and realizing how prevalent their use was among Africans living in the diaspora after settling in Canada in 2017, inspired Tolulope Osho, Yusuf Yakubu and Adewale Afolabi — all Nigerians — to innovate responsive remittance products in late 2021, initially targeting the Canada-to-Africa remittance market, but now eyeing global activity.
Their resolve comes at a time when remittances to low-and-middle-income countries (LMICs) are reported to have increased by 38% over the last six years to $656 billion by the end of 2023.
The World Bank estimates a further rise in 2024 and 2025 against increasing demand for fast, affordable and reliable cross-border remittance services. Digital remittance tools, the World Bank notes, will continue to accelerate remittance activities by lessening transaction costs and increasing the access to formal money transfer channels.
Pesa’s goal right off the bat was to enable users to send money in the “most secure and fastest way possible” and to “remove borders around money,” Osho, the startup’s CEO, told TechCrunch.
The channel was built as a multi-currency wallet that allows users to send, receive and hold multiple currencies (six for now).
“The way we’re looking at remittance is that you should keep on transacting when you move to a new country; If I leave Nigeria for Canada, there shouldn’t be any sort of break in transmission with respect to how I view financial services. I should be able to transact back at home like I really never left,” said Osho.
“With our multi-currency wallet, it means that as you transition between these countries (Nigeria, Canada, the E.U, U.S, U.K. and Ghana) you’re able to take your money with you like it’s in your wallet,” he said.
Pesa pursues global expansion
The fintech is in the final stages of acquiring the requisite licenses for roll out in the United States, having just recently launched in 27 European Union countries. Pesa is also present in the U.K, through a partnership, in the interim, as it works to acquire an Electronic Money Institution (EMI) license, which Osho says will give it the full functionality of a bank. The license will enable it to offer cheaper services, issue and hold e-money on behalf of customers and build more products for its users.
Pesa’s efforts to increase coverage will enable its users in these regions to send money to its five African markets, including Nigeria and Ghana, and India, which it entered last March. The India launch was a chess move that would facilitate inroads into the world’s leading remittance destination — the country received $120 billion last year, with a projected increase to $129 billion in 2025. India is also the largest origin of migrants globally. Meanwhile, Pesa is ramping up its service into Sub-Saharan Africa, which recently reached $54 billion buoyed by top recipients such as Nigeria and Kenya.
Its ongoing expansion bid will step up competition for other companies in the digital remittance space, including Tanzania’s Nala, which raised $40 million in a Series A funding recently, Leatherback, Send by Flutterwave, LemFi, Eversend and established entities such as Wise and Zepz.
And as it pursues global growth, Pesa, part of Fast Forward Venture Studio’s current cohort, and whose takeoff has majorly been bootstrapped, has made remarkable strides, including attaining profitability in under two years of operation. It has so far processed over a million transactions valued at $380 million, garnering 60,000 users, 30% of whom are active.
The team is heavily optimistic about its impact in the new markets, and products like the planned multi-currency cards.
“We are going for growth, finishing our expansion and integrations across all the continents we’re expanding to,” said Yakubu. “At that point we’ll be generating more revenue than we are today.”