Remittances at the Hands of Every Migrant

One of the most important and controversial political and economical matters in today’s world is migration taking place worldwide, and the several difficulties and challenges associated with this process. The reasons why people decide to migrate from their origin countries into a different one are vast and complex. Some of the most popular issues that are forcing this phenomenon are absence of labor and employment opportunities in their countries of origin, faulty public health and educational services, macroeconomics conflicts taking place such as wars and violent events, among many others. 

According to the World Bank, the global average cost in Q3 2022 of sending $200 USD was 6.30%, an increase of 29 basis points with respect to the previous quarter, and remains still distant from the G20 commitment of reducing the global average to 5%. One of the biggest types of services providers are banks, and have an average cost of 11.69%, thus indicating that the global average cost of remittances remains high worldwide and has a long way to go to make remittances more affordable. 

Remitee has identified the lack of an efficient and affordable money transfer service in many underserved countries in Latin America. Currently, the process of sending international money transfers can take up to five days due to several factors such as fraud prevention, erroneous payment details, holidays and weekends, different currencies, different time zones, the place where you’re sending or receiving funds, among others. These factors that delay international money transfers are crucial and impact the lives of migrants, as remittances are generally highly time sensitive.  

Remitee was incubated at the Sandbox Innovation Fund Program, by the Massachusetts Institute of Technology, by two students of the Sloan School of Management, Sergio Saravia and Eduardo Hamel. It was founded with a clear purpose: facilitate the lives of millions of migrants. Since its inception, it has focused on connecting families across the globe by offering adequate tools and facilitating cross-border payments with its platform.

Remitee was born as a C2C platform in Argentina and Chile where expats (most of them not banked) could easily send money to their families and friends, and as a services payments platform. After a successful positioning in the C2C segment, Remitee decided to expand their model by partnering with banks, financial and remittance institutions, among others, to achieve a greater reach in the United States, Latin America, Europe, and other countries.

Remitee currently has two business models: Business-to-Business-to-Consumer (B2B2C) and Consumer-to-Consumer (C2C). In the B2B2C model, Remitee partners with banks, financial, and remittance institutions that already have their Application Programming Interface (API) based on different technologies, and Remitee made the integration efforts with every partner to connect their API with Remitee’s API to be able to send payment orders in the different currencies and payment methods available, allowing customers of these different institutions to send payments to their families and friends. For each of these integrations, Remitee executes the proper commercial agreements, Due Diligence and technological integration processes to ensure a smooth integration.

As collateral to optimize its own operation, Remitee developed a payment network with great capillarity. Remitee currently has fiat payment capabilities in Latin America, the United States, Mexico, Europe and other countries.

  Remitee works with its partners with three different schemes:

• Pre-paid, where the partner transfers Remitee fiat money and accredits it.   

•  Post-paid, where Remitee frequently claims the cancellation of the generated debt.

• On-demand liquidity, where each transaction comes with money attached.

The C2C model currently operates in Argentina and Chile, with capabilities of sending money to countries in Latin America, the United States, Europe, and Africa. Capital flows under this business model are simpler, as the payer sends Remitee the total transferred amount, and Remitee sends it to the receiver’s institution. 

Remitee is a multi-purpose cross-border payment platform that helps millions of Latin-Americans send money to be collected in cash, e-wallet or bank account within minutes, as well as perform direct payments of different services such as utility bills, pre-paid mobile phones or branded gift cards, among others.

According to IADB, in 2022 migrants sent $142 billion USD to Latin American and Caribbean countries, 11.6% higher with respect to the prior year. Having in mind that this year experienced a great recovery following a pandemic year, remittances had the highest growth in the last 20 years. The countries with the most remittances received during 2022 are Mexico ($58 billion), Guatemala ($18 billion), Dominican Republic ($10 billion), Colombia ($9 billion), and Honduras ($9 billion).

Latin America and the Caribbean are geographies that are currently experiencing pronounced alterations in migration patterns. According to the Inter-American Development Bank, Venezuela’s current political and economical situation has produced the second largest displacement of people after Syria, and is receiving less international attention and resources. Simultaneously, there is an increasing population in Haiti that is migrating to South American countries, notably to Argentina and Chile, Central American multitudes migrating into Mexico and the United States, and Nicaraguans migrating into Costa Rica.  

Remitee is the first startup offering digital transfers with all these alternatives from a mobile App for more than 12 million underserved people, most of them unbanked. According to the Statista Research Department, Brazil and Chile are the Latin American countries with the highest digital banking penetration, 77.3% and 66.3%, respectively. On the other hand, Mexico and Peru only have 47.8% and 44.2% digital banking penetration, respectively. 

Remitee is conscious that migration is a natural phenomenon that will follow an increasing trend in the future, and its solution aims to reduce and eliminate the several challenges that migrants face, making it easier and more accessible for them to send money to their families and loved ones. With many of the company’s employees and founders having a migrant background, Remitee knows that migration can be a troubling and difficult experience, as well as the importance of providing people the necessary means to conduct a decent life quality.  By partnering with financial institutions to a greater degree, as well as heavily investing in its B2C platform, Remitee is facilitating the lives of these migrants by enabling them to provide their families with the means to purchase basic food basket products, clothing, as well as other expenditures. 

Being born in immigrant families, Remitee’s founders have always seen first-hand, and are aware of the difficulties of sending and receiving money to and from their families.

Sergio Saravia, CEO and co-founder of Remitee, was born in Argentina to humble and hard-working Bolivian parents. During his professional career, Sergio worked for 12 years in Western Union, one of the leading cross-border payments in the world, in many Central and South American countries. He has extensive experience in the payments industry as well as strong operational and strategic capabilities for delivering innovative solutions in complex markets. After working for more than 12 years in Western Union, his latest position being Chief Financial Officer for Americas Central & South, Sergio discovered how vaguely the money transfer industry had evolved, consequently identifying a major market need for many Latin Americans. Since funding Remitee, Sergio has focused on shifting the way payments are made worldwide to make remittances more accessible and affordable to all.

Nicolas Zamudio, CFO and co-founder was born in Argentina, grandson to Spanish grandparents who migrated from Spain when they were only 20 years old and with the exact amount of $5 USD. He was raised in a hard-working environment, where he learned that financial inclusion and education are the best ways to create a fair, equitable, and transparent financial system. He has extensive financial experience, occupying similar positions for more than 15 years. Before joining Remitee, he was vice president and finance and administration manager at ARSAT (Argentine Satellite Solutions Company), and senior treasury manager at Western Union. 

Eduardo Hamel, CCO and CMO and co-founder, as 20 years of experience in leadership positions related to business development, marketing direction, customer success, business intelligence and technology development both in startups and large corporations. He formed the team that pioneered the use of artificial intelligence to solve a wide variety of business issues connected with customers, forecast and commercial effectiveness, among others. At Procter & Gamble, he developed several strategies to launch and re-stage products across Latam. At the beginning of his career he was a 2x entrepreneur at tech companies with successful exits. 

Consequently, both Sergio and Eduardo decided to deepen their knowledge and skills at one of the most regarded and prestigious institutions in the world in order to develop a solution that would impact and improve the lives of migrants, and attended the Sloan School of Management, where they flourished their idea before officially launching Remitee in 2017.

Currently, Remitee holds partnerships with some of the most reputable institutions in the financial industry, thus confirming that Remitee possesses the most innovative and functional tools to impact the lives of millions of immigrants across the world. Since the beginning of our relationship, one of Remitee’s biggest partners once remarked its astonishment with Remitee’s platform and technology team to deliver top-tier service, and this demonstrates that Remitee is on the right path to keep on impacting the lives of the immigrant community in a positive way.

Remitee’s C2C platform is currently operating in Argentina and Chile, and shortly will begin implementation processes in other Latin American countries such as Colombia, Mexico, Peru, among others.  

As to the B2B segment, Remitee already has 34 partnerships with banks, neobanks, e-wallets, digital & traditional money transfer operators, etc., growing from 15 partnerships in 2021, and leveraging from Remitee's API-driven cross border payment technology. 

During 2022, Remitee’s technology services helped serve 35,046 different senders as well as 46,457 receivers. During 2023 YTD, Remitee has already served 28,685 senders and 46,457 receivers. In percentage terms, this year the company has already accomplished 82% of 2022’s milestone in the sender side, as well as 80% of 2022’s milestone in the receiver side.

Remitee is cognizant of MIT and Solve’s constant monetary and human capital investment in the entrepreneurial ecosystem.  As a company in the scaling stage, Remitee is conscious of the diverse benefits of being part of the Solve community. 

Remitee’s Commercial Team efforts are mainly focused on attaining new partnerships with banks, financial, and remittance institutions, thus carrying out the company’s mission of helping more and more migrants worldwide. The company strongly believes that working next to Solve’s community will enable Remitee to develop fundamental relationships with key potential partners, as well as mentorship from its members that will add value to Remitee’s team in order to execute the company’s commercial plan.  

The company is convinced that partnering with Solve will enable Remitee to reach out to the top talent in the technology area who will support the company in the current project of the Implementation of Blockchain, as well as future technological projects that the company has already identified and will develop in the near future. 

The company is already planning its next investment round in order to secure capital to fund its operations for 2023 and 2024 and accelerate its growth to help more underserved migrants in Latin America, USA, and Europe. By joining Solve’s community, Remitee believes it will benefit from the community’s professional network to have a more complete preparation towards this process by having one-on-one meetings with high-value entrepreneurs, as well as the identification of potential top investors to present to them Remitee’s Business Plan and have the opportunity of investing in it, if they see fit.

Ever since its inception, Remitee has revolutionized the way remittances are made, from end to end. Remitee was born as a solution to a large, underserved, and mainly unbanked population, making remittances more affordable and accessible, simpler, faster and more secure. 

As Remitee’s business model evolved and immersed itself into the B2B2C segment, the company began working with some of the most important and reputable players in the industry. Remitee has had an essential role in the processing of transactions of some of the biggest players in the market, with a sharp technology that has eliminated bureaucratic processes that slow international transfers. 

Remitee has a broad customer support team that brings support and assistance at any stage of the process, which has allowed it to keep a significantly low rejection rate. Remitee’s technology has proven to be innovative, functional, and highly scalable, and the current partnerships it holds with several large players in the industry validate this. One of Remitee’s first and biggest partners has declared its amusement with the company’s capabilities to deliver an outstanding product that has a daily impact on millions of migrants. 

Currently, the company is conducting different technological projects that will allow a better and more efficient product. One of the most significant projects is the implementation of Blockchain technology in every transaction to eliminate the need for conciliations between businesses. Given the public nature of the Blockchain records and the possibility to implement smart contracts to execute the transactions, all the parties involved in the remittance process can monitor and directly allow or disallow the transactions.  Because of the transparency of the Block-Chain and the smart contract technology working on it, each business involved in the transaction is able not only to see the state of every transaction but also the logic by which it was approved or denied. We consider it relevant to mention the improvement in speed and costs that the technology offers. Even though it's not necessarily a problem of the current method of remittance, block-chain allows for more consistent, faster, and cheaper cross-border transactions. The innovation comes not only from implementing this new technology to Remitee's operations solving the issues discussed before but also from allowing the individuals and business in Remitee's network to benefit from it without the need to learn it and implement it themselves.

For 2023, Remitee has the objective of impacting the lives of more than 100,000 senders and 100,000 receivers worldwide. With this metric, Remitee hopes that more households can benefit from Remitee's cross-payment services.

In terms of GTV and Revenue, Remitee hopes that with the successful execution of its Commercial Plan, and the alliance with several strategic partners, the company can reach the milestones of $50 million of monthly GTV and $5M of monthly Revenue, thus offering more migrants Remitee's technology to improve their quality of life. 

The company has the clear mission of sustaining this important growth rate throughout the next five years, leading to a successful IPO of the company in 2028. Remitee's goal is to generate a monthly GTV of $5 billion by 2028, as well as a $500 million monthly revenue. With these metrics, Remitee plans to support more than 10 million senders and receivers throughout 2028.

Some of the indicators Remitee is using in order to measure its progress toward its goals are the total amount of transactions, total partnerships in its B2B2C platform, total clients that are being positively impacted by its C2C platform, as well as its GTV. 

Remitee has a broad technology team that is recurrently measuring these indicators to have a better understanding of Remitee's highs and lows, areas of improvement, among others. 

With these indicators in mind, Remitee aims at its impact goal of promoting sustained, inclusive, and sustainable economic growth, full and productive employment and decent work for all, as well as providing a fair, equitable, and advanced platform for all, including a large underserved population across the globe. Remitee is a platform and application for the people, with the sole purpose of impacting the lives of millions of migrants through a more inclusive and accessible platform.

Remitee’s mission is clear: to facilitate the lives of millions of migrants. Remitee offers adequate infrastructure and technologies to mitigate the most common challenges of international transfers. To execute this, Remitee defies the way traditional banks, financial institutions, and remittances companies make payments, by reducing the time international transfer payments are processed while making them more accessible and affordable. 

Today, one billion people worldwide are involved with the sending or receiving of remittances. Every year, 200 million migrants send money to their families and 800 million people benefit from these remittances. Recipient households’ profit from remittances as they supply an additional source of income and have a strong correlation with the reduction of poverty, thus allowing them to purchase goods and services, invest in education and healthcare, as well as allowing them to build their own wealth. In average, migrants send $200-300 USD monthly, which could represent as much as 60% of the household’s total income, indicating that this additional source of revenue is fundamental in these people’s lives. This provides recipients with a higher life quality, assets to combat economic shocks, and the opportunity for a better future. 

Remittances have proven to have a strong link to economic growth in the recipient countries. According to the International Fund for Agricultural Development, more than 70 countries rely on remittances for at least 4% of their GDP, thus indicating that remittances are an engine of socio-economic growth and transformation in the recipient countries. Between 2022 and 2030, an estimated $5.4 trillion USD will be sent by migrants back to their family’s households in developing countries. Despite fears of a possible economic recession, the remittances industry is expected to follow an upward trend, as the industry has proven to be resilient in the past to economic shocks and recessions. Remitee is conscious of this trend and is confident that with its business model and its cutting-edge technologies, will continue to impact the lives of more and more migrants across the globe, making remittances simpler, faster, and more affordable.

Remitee is a distributed system based on microservices, having a service bus as a backbone that allows the interaction of services with low maintenance.

Each service can be scaled separately, and in order to provide a unified interface to client applications, they are aggregated using API gateways.

The integration with a new paid network does not require major changes in the platform, just the creation of a service that acts as a middleware between Remitee and the destination network, and that it subscribes to the event bus, processes the messages routed to that network, and emits the standard response events to the Remitee platform.

Regarding transaction processing capabilities, Remitee can process its own payment orders as well as those of partners which are integrated through a proprietary API (from Remitee) or through Ripple (XCurrent). 

These microservices are developed in netcore and in the case of exposing an API they force authentication/authorization through Oauth2.There are some machine learning services that are developed in Python. The web interfaces of the operations team are developed in Angular 7 with Material Design.

As for the application, it is developed in React Native.

In addition to this, Remitee is currently implementing Blockchain technology in every transaction to eliminate the need for conciliations between businesses.

Some of Remitee’s core values are diversity, equity, and inclusivity, as the company believes that offering a diverse and equal workplace is beneficial for all, not to mention that everyone deserves the same opportunities. Remitee is aware that diversity in the workplace often leads to more creative ideas that are extremely valuable in problem-solving scenarios, and that it can offer a better understanding of its customers. Remitee is convinced that providing an equal, diverse, and inclusive workplace and environment brings out the best of each employee, as employees often find themselves more motivated working under a free and proper environment, where each one is an equal and its voice and opinion are highly valuable. As an example of this, at any work meeting in the company, anyone is free to give their opinion, no matter what their role is, as getting to know all the members’ perspectives adds great value to the company.

Remitee’s members come from different backgrounds and ethnicities, some of them being migrants themselves. The company understands that performing in this industry, practicing these core values is essential to better understand its customer’s needs and thus feel more motivated to improve their lives. Remitee values, embraces, and reinforces diversity, equity, and inclusivity in its workplace. 

Remitee initially started its operations in 2017 as a C2C platform as well as a services payments platform, and in 2019 deployed its B2B2C model. Today, Remitee’s revenue model is composed of three pillars: a fixed fee that the sender is charged, the FX spread from each transaction, and a rebate that the services company pays Remitee for each transaction.

Remitee’s C2C platform is designed for migrants who provide or seek financial support to/from their families and friends, most of them unbanked and underserved. As the rate of digital banking penetration in Latin America remains low with respect to other geographies such as North America and Europe, this platform offers the facilities and technologies to assist this marginalized population. Migrants who live in Argentina and Chile use Remitee’s platform to send financial support to their families across many countries in the world by submitting the receiver’s banking information and receive the money in minutes. The sending fee is $1 USD on average. Currently operating in Argentina and Chile, Remitee is planning to expand its operations to other countries where it has a legal entity or is in process of obtaining it, such as the United States, Colombia, Mexico, and Peru. 

The services payments model is intended to help migrants perform direct payments of different basic services such as utility bills, pre-paid mobile phones, branded gift cards, among others. Remitee holds partnerships with different service providers companies so unbanked migrants can have an easy and user friendly tool to pay for their services. In this model, the services provider company pays a rebate to Remitee that is between the 5%-10% range. 

Remitee’s B2B2C model is the company’s most important and used platform to help improve the lives of millions of migrants, which offers the possibility of offering Remitee’s cutting-edge technology services to a greater degree. This highly scalable and functional model has proven to be successful, and the several partnerships that Remitee holds with many of the most reputable financial institutions of the world confirm it. Remitee realizes commercial and technological efforts to add strategic partners to its network, and some of these partners include many of the United States and Latin America’s biggest and most reputable commercial banks, financial institutions, remittances companies, among others. Under this model, Remitee has two different types of partners: inbound and outbound partners. Inbound partners are the sender’s financial institutions that send Remitee the total amount to be transferred, and sequentially Remitee transfers this money to the outbound partner who processes it and makes the last-mile delivery to the receiver.  

Since its foundation in 2017, Remitee has had very clear the path that it has to follow in order to impact the lives of millions of migrants and at the same time become financially sustainable, in order to keep strengthening its products and services. 

Remitee knows that to achieve financial sustainability and profitability, it is essential to bring in money to the company through different schemes, such as capital coming from Friends and Family, donations and grants from different institutions, as well as from capital from institutional investors.  

With the total amount of money that Remitee has received, it has invested an important proportion in the strengthening of the team, for the purpose of improving its products and services it offers to its clients, and to develop different strategic and technological projects that will add great value and will allow the company to grow its Gross Transaction Value (GTV) and Revenue. Currently, Remitee is in the process of executing a Commercial Plan that will grow its GTV 50x by the end of 2023, having started this Plan in June 2022. To successfully execute this Plan, Remitee has designed and is implementing the actions and measures it must take week-to-week so it can carry out the integration processes with several partners such as banks, financial institutions, remittance companies, among others. 

Additionally, with the team investment, the company is identifying different capital streams that will foster rapid growth. On one hand, the company is already planning its next round of investment capital between 2023-2024 and is monitoring different competitions in which will showcase its different technological projects to win donations and grants.

With this Commercial Plan successfully executed, as well as other value-adding projects, Remitee is expected to achieve profitability by the end of 2023.

Since its inception, Remitee has displayed exceptional proficiency in achieving financial sustainability, successfully raising a remarkable sum of approximately $5.9 million USD through astute funding from an impressive array of prominent Angel Investors, Venture Capitalists, and distinguished institutions. Some of these funds include Kalei Ventures (LatAm), ArkFund (Mexico), Latitud VC (LatAm), Encomenda VC (Spain), Soma Capital (USA), Algorand Foundation (USA), Banco Santander (Chile), among others.

The company has participated in different competitions for the obtaining of grants that have demonstrated Remitee’s capabilities and potential to become the best financial partner in the remittances industry. In total, Remitee has secured $300k USD from institutions such as Corporacion de Fomento de la Produccion (CORFO), an agency of the Chilean government that promotes regional economic growth, Accelerating Spain, a philanthropic initiative that aims to connect Argentinian startup founders with Spanish market leaders, and Ripple. In addition, Remitee has also been granted a zero-interest loan of more than $30,000 USD by Argentina’s Ministry of Economics.

The company is generating monthly GTV of more than $7 million USD and revenue of more than $1 million USD, which is placing Remitee closer to its 50x Commercial Plan and therefore to financial sustainability. Not only has Remitee secured significant funding from prominent investors and institutions, but the company's revenue has skyrocketed with an impressive 8x YoY growth (comparing Q1-2023 Vs Q1-2022). Even better, the Gross Margin remains positive at around 10%, making the company confident that with this impressive growth rate, Remitee will break even in Q4 2023.

Remitee is already planning its next investment round between 2023 and 2024, and is already identifying potential key investors that align with Remitee’s thesis, including possible add-ons from current investors.