LemFi raised $33 M Series A funding to streamline remittance payments for immigrants
LemFi has raised $33 million in Series A funding to streamline remittance payments for immigrants worldwide, building on its track record of successfully serving African migrants in Canada and the UK. Left Lane Capital took the lead in the round. Y-Combinator, Zrosk, Global Founders Capital, and Olive Tree were some of the additional investors. LemFi’s $33 million Series A brings its total funding since its founding in 2019 to just under $34 million.
Asia is where most immigrants to Canada originate. About 86,000 of the 341,000 people in the aforementioned 2019 example were Indian. African immigrants from Nigeria and Eritrea made up less than 20,000 new arrivals. Similar figures apply to those who relocate to Europe.
Immigrants deal with a number of common issues regardless of where they are from. One significant issue is that newcomers often experience stress and overwhelm as a result of their new homes’ banking systems. And one of their struggles is sending money home. Globally, migrant remittances totaled $626 billion in 2022. These remittances are a significant source of foreign exchange for many African nations. Even some nations encourage their citizens to work abroad in order to send money home.
Ridwan Olalere and Rian Cochran decided it was time to launch their mobile remittance service in 2020, the year that global migration decreased as a result of the pandemic. The service would provide immediate international transfers to the African diaspora community in Canada. It was originally known as Lemonade Finance, now abbreviated to LemFi. Sending money home before LemFi required combining several payment or money transfer services, with fees of up to 8% of the transaction. Even more challenging and complicated was receiving money from home.
“In 2020, set out to begin to stake our claim and the area of global financial services. For immigrants starting with Africans first and got our first authorization in Canada,” Cochran tells TechCabal. “As a money service business, we began by offering remittance services and then just slowly built out the footprint,” he adds.
Ridwan Olalere, co-founder and CEO of LemFi, was previously in charge of Uber’s operations in Nigeria and worked on one of Flutterwave’s key payment products. From 2008 to 2020, Cochran advanced within Opera Software AS, becoming Senior Finance Director as the company’s OPay payment product expanded quickly in Nigeria.
Both men first met while working on OPay, where Olalere once oversaw the company’s payment product development.
Lemonade Finance started in Canada and quickly expanded, reaching the UK by 2021. According to the UK government’s ethnicity facts and figures research, 1.4 million people in England and Wales (or about 2.5% of the population) are believed to be of African descent.
Additionally, the company was working to expand the list of African nations from which users could send or receive money. Ten new African remittance corridors had been added by the end of 2021. LemFi now wants to make zero-fee money transfers easier for migrants from emerging market nations. Instead, the business profits from small FX spreads. LemFi does not provide lending (to make money on user deposits, as would a bank) because its UK license only allows for the creation of wallets and the holding of user funds.
