Currencycloud, a London-based creator of APIs that power remittance and currency exchange services, is drawing even closer to Visa a year and a half after raising $80 million in a round that included the company. Visa announced that it would buy Currencycloud for $963 million (£700 million) in a deal.
This is a significant increase over the startup’s last investment round, when sources told us it was valued at roughly $500 million.
(Since Visa owns a portion of the company, the amount it will actually pay will be reduced.)
Currencycloud’s APIs are used by over 500 companies in 180 countries to enable multicurrency wallets, currency conversion services, and account management, including some of the most well-known firms such as Monzo, Moneze, Starling, Revolut, and Dwolla.
These will continue, and Visa will also leverage the startup’s technology to improve its own currency exchange rails in order to deliver a broader set of services to its own customers, who include financial institutions, fintechs, and others, as well as develop new consumer services.
“At Currencycloud, we’ve always strived to deliver a better tomorrow for all, from the smallest start-up to the global multi-nationals. Re-imagining how money flows around the global economy just got more exciting as we join Visa,” said Currencycloud CEO Mike Laven in a statement. “The combination of Currencycloud’s fintech expertise and Visa’s network will enable us to deliver greater customer value to the businesses moving money across borders.”
In the world of financial services, remittances and currency transfers are significant business, and the opportunity is expanding. Two of the elements driving this are that e-commerce and supply chains have expanded well beyond our national borders, particularly in the last 18 months.
According to Visa, 43% of all small firms in the world did some type of foreign trading in 2020. Consumers’ outlooks are becoming increasingly globalized, thanks to the rise of cloud-based, mobile technologies that expedite transactions.
Remittances and currency transfers, on the other hand, are two areas ripe for disruption, with incumbent services typically being expensive and inefficient. All of this paves the way for companies like Currencycloud, which has developed a new currency transfer technology that can be integrated into other financial services to make them function more seamlessly.
The exit is also a prime example of how larger, more established financial powerhouses typically find it more difficult to innovate and jump into new services, so they turn to smaller, more agile startups that are willing to make big bets on technology and succeed to help propel them into the next generation of financial services.
Visa’s ability to successfully integrate and utilize Currencycloud’s technology, as well as work with its personnel, has already been tested: the two were strategic partners prior to this acquisition.
“The acquisition of Currencycloud is another example of Visa executing on our network of networks strategy to facilitate global money movement,” said Visa’s Global Treasurer Colleen Ostrowski in a statement. “Consumers and businesses increasingly expect transparency, speed and simplicity when making or receiving international payments. With our acquisition of Currencycloud, we can support our clients and partners to further reduce the pain points of cross-border payments and develop great user experiences for their customers.”