Remitly aims to raise up to $294M at nearly $7B valuation in IPO for Seattle fintech giant

(Remitly pics)

Remitly sets the terms for the IPO on Tuesday.

The fintech firm plans to raise up to $ 294 million in what would be one of the largest IPOs for a Seattle area tech company.

The shares are expected to cost between $ 38 and $ 42 and are remitly valued at potentially more than $ 6.7 billion. Remitly’s last valuation was in July at $ 1.5 billion.

Founded in 2011, Remitly’s mobile technology enables people to send and receive money across borders, including immigrants in the US and UK who support families at home in countries like the Philippines, India, El Salvador and others. The service eliminates forms, codes and agents normally associated with the international money transfer process.

The company had sales of $ 202 million and a net loss of $ 9.2 million for the first six months of this year. It had sales of $ 257 million and a net loss of $ 32.5 million in 2020, doubling its annual revenue and nearly halving its loss.

Jason Stoffer, a Seattle-based Maveron venture capitalist best known for his “ripping” IPO filings, analyzed Remitly’s business metrics last week. Stoffer, who chose not to invest, said the company had proven him wrong. Expecting Remitly to reach $ 600 million in revenue next year, he points to its “superior business model over older companies” like Western Union and MoneyGram.

2 / @remitly proved me wrong and implemented their vision brilliantly. Customers no longer have to queue up in the @westernunion and pay unreasonably high fees. Remitly has high marketing spend, but great TAM, strong customer loyalty, and increased operational leverage point to a bright future.

– jstoffer (@jstoffer) September 9, 2021

Remitly competes with a number of other cross-border money transfer companies, including Wise (formerly TransferWise), valued at $ 11 billion via direct listing following its IPO in July, and Zepz (formerly WorldRemit), which was in a series of US $ 292 million Dollar brought in e-funding last week.

Investor interest in these companies reflects the growth opportunities for digital remittances. Remitly said the global money transfer market was valued at $ 1.5 trillion in 2020. Its business and the digital financial services industry as a whole have accelerated as a result of the pandemic.

A new report from PitchBook finds that VC exits for fintech companies “exploded” in the second quarter totaling more than $ 134 billion, more than the past seven years combined.

Remitly is traded on the Nasdaq under the ticker “RELY”.

Remitly CEO Matt Oppenheimer helped develop the idea for Remitly while working for Barclays Bank in Kenya. He founded the company in 2011 with Josh Hug and Shivaas Gulati; the original name for the startup was Beamit Mobile.

The company’s largest shareholder is PayU von Prosus with 23.9%, followed by Stripes (12.1%) and Threshold Ventures (9.4%). Seattle-based Trilogy Equity Partners has a 6.2% stake. Oppenheimer holds 4.8% of the shares, Hug 3.1%.

This year, eleven more Washington state companies went public, both through a traditional IPO and a SPAC deal. Sana Biotechnology had its largest ever total in 2021 at $ 587.5 million.