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The global digital remittance market is expected to grow at 13% CAGR to reach $42.46 billion by 2028. Seattle-based Remitly (NASDAQ: RELY) is a leading player in the market that recently went public amid tumultuous market conditions.

Remitly’s Offerings

Founded in 2011 by Josh Hug, Matthew Oppenheimer, and Shivaas Gulati, Remitly is a mobile payment service that allows customers to make person-to-person international money transfers from the US.

The inspiration behind Remitly came to Matt while he was working in Kenya. Matt realized how some families were dependent on the money sent from their family members working abroad. He realized that the process to send and receive money overseas was not very transparent, easy, and affordable. He wanted to build a technology solution that could make this remittance process easier for immigrant communities and cross-border remittances. When I met Matt a few years ago, he was focusing on the opportunity available in various international markets to build digital products leveraging smartphones and the relationship that these customers can have with digital products.

Today, Remitly has become a leading digital financial services provider for immigrants and their families in over 135 countries. Its app for international payments uses an easy-to-use, end-to-end process.

Last year, Remitly launched Passbook, a digital banking service in partnership with Sunrise Bank. The service is available through a mobile app and is uniquely designed for immigrants. It has a customized identity verification process that uses its existing technology platform to allow users to sign up for a Passbook account in under ten minutes. It plans to leverage this data-driven platform to fuel analytics, drive meaningful customer insights, and improve the entire transaction processing life cycle. It will be able to give its customers details on revenue and fees structures from the bank partners, thus broadening the available options for accessing financial services.

Over the past decade, Remitly has built relationships with more than 15 top-tier banks including Barclays, Chase, HSBC, and Wells Fargo, and also has a direct relationship with Visa. These relationships help provide a wide array of options to fund remittances through banks or even a credit card.

Remitly has also expanded its services to the enterprise market. Last year, it began serving business customers with the launch of Remitly For Developers, a remittance-as-a-service offering that leverages custom-built global network and compliance and regulatory infrastructure. The solution allows developers to integrate their applications and websites into Remitly’s network and infrastructure through an API, offer digital cross-border remittances to end customers, and introduce new digital banking solutions in emerging markets.

Remitly’s Financials

Remitly earns revenues from its core remittance product by charging transaction fees to customers and foreign exchange spreads applied to its customer’s principal. Its revenue in 2020 grew an impressive 103% to $257 million from $126.6 million in 2019. Net loss fell from $51.4 million in 2019 to $32.6 million in 2020.

For the six months ended June 30 this year, its revenues grew 92% to $202.1 million. Net losses dropped from $21.1 million a year ago to $9.2 million for the same period.

Remitly has a long list of competitors vying for the market. Competition comes from banking and financial institutions to players like Azimo, Western Union, PayPal, MoneyGram, Digital Wallet, and many more. Additionally, the market is facing competition from neobanks and cryptocurrency providers.

Remitly went public in September this year. Before going public, it had raised $505 million in thirteen rounds of funding. The most recent round was held in July 2020 for $85 million. Its list price was $43 and was valued at $6.9 billion. It is currently trading at $36.18 with a market capitalization of $6.25 billion.