why did I invest in paysend?
The core differentiator of Paysend compared to other fintechs like Paypal, Wise, or Revolut is:
One of the main questions I ask when answering Should I invest in this startup? is: “Does this company have a competitive moat?” It also aligns with my investment conviction of finding companies that have the core essentials of an infrastructure.
In this case, Paysend fits that. Instead of connecting with other APIs and integrating tools into their platforms, Paysend took a vertical integrated approach, having built everything from the ground up. Since both of its processing and acquiring facilities are in-house, it allows Paysend to see what the consumer needs and uses to deliver at a lower cost, and those savings are passed down to the consumer.
Founded in 2017, its heavy focus on customer needs and constant innovation have helped it scale with a global reach of 185 countries, 8.1 million registered customers in 2023 (Q4) on its platform, and its push into cross-border payments.
Cross-border payments are a huge market, and a study conducted by McKinsey states that 70% of international payments are still cash-to-cash, with fees averaging 5.2% per transaction and taking up to an hour for each for the sender and the receiver. Paysend claims to have cut that cost by 60%. Which unlocks up to $5.4 billion in annual savings for consumers and SMEs by 2025 and millions of hours.
It’s strategic partnerships with Mastercard and Televisa (a Spanish-language media house) are tailored to capture the Latin America and USA money transfer corridors. Just to give you an idea of how big remittances in Latin America are: In 2022, remittances to Latin America and the Caribbean reached $145 billion, an 11.3% increase from 2021, and the Inter American Development Bank projects that remittances will reach $155 billion in 2023 with sustained growth of 10% each year.
Paysend aims to enhance cross-border transactions for small and medium-enterprises. The company aims to open new transaction corridors enhancing person to person transactions between Europe and other regions.
Additionally, Paysend established a partnership with Western Union integrating Paysend’s single API solution to allow seamless processing of Western Union customer payments direct to Visa and Mastercard debit cards, delivering near-instant payouts at live FX rates, 24/7, 365 days a year.
Another factor I look for in startups to invest in is a strong leadership team which Paysend undoubtedly has starting with;
Abdul Abdulkerimo who is the Co-Founder and Chairman of Paysend. He comes with a 20-year track record of entrepreneurship. Abdul was also a Founding Partner in Digital Space Ventures until 2016, a UK-based VC firm investing in seed and early-stage fintech companies. He is also the founder of Luminary, an innovative educational center in Khryug village in Russia’s Republic of Dagestan. Abdul holds a Global Executive MBA from NYU Stern, LSE, and HEC Paris (TRIUM).
Ronald Millar, the other co-founder of Paysend. Ronald ‘Ronnie’ is a serial entrepreneur, having co-founded and run a number of companies including Paywizard and MGt Plc. He comes from an accountancy and investment background and was formerly Finance Director for Argent Group Plc. Ronnie holds a Master’s Degree in Economics from the University of Edinburgh.
In conclusion, Paysend’s competitive edge in vertical integration, its focus on a massive and underserved market (cross-border payments), and its strategic partnerships with industry giants like Mastercard, Western Union, and Televisa all point to a company with significant growth potential. Furthermore, the strong leadership team with a proven track record in finance and technology solidifies my confidence in Paysend’s ability to disrupt the traditional financial landscape.
