Remitly has built its business on offering app-based digital services to migrants worldwide, aiming to enable customers to avoid using slower, more expensive traditional remittance services. Rewire’s approach has been similar in trying to create a simple service that users can tap easily.

“Rewire’s customers create an account with which money can be stored to be remitted at any time,” the release said. “This approach deepens relationships with customers and provides additional flexibility and convenience.”

Remitly expects Rewire’s product development and engineering to enhance its workforce, the company said in the release. Rewire has about 150 employees and the combined company will have close to 2,400 employees globally, a spokesperson for Remitly said. Remitly plans to retain all of Rewire’s employees, the spokesperson said.

“This acquisition is consistent with Remitly’s strategy of acquiring assets that complement the existing platform, expand its geographical presence, and create strong cross-selling opportunities,” the financial firm William Blair said in a Tuesday equity research report regarding the acquisition.

Remittance payments have been expected to continue climbing this year to $802 billion, an increase of about 3.7% from a year earlier, largely because of the upheaval in Ukraine caused by Russia’s invasion in February, according to a World Bank report earlier this year. On average globally, it cost 6% to send $200 in the fourth quarter of 2021, the World Bank said.

Of the 7,586 consumers surveyed in Mastercard’s 2022 Borderless Payments Report, the share of consumers who made more frequent cross-border payments last year was 44%, up from 38% in 2020. Similarly, the share who received more frequent payments was 43% last year, up from 36% in 2020.

Remitly doesn’t expect any material impact this year from the acquisition to its revenue or earnings before taxes, interest, depreciation and amortization. The transaction is expected to close in the second half of this year.

“Rewire accelerates our progress as together we will continue to bring to market trusted financial services that are inclusive and accessible to all,” Remitly CEO and cofounder Matt Oppenheimer said in the release.

By Lynne Marek on Aug 17, 2022
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