LemFi, a company specializing in cross-border payments, has secured $53 million in new funding to accelerate customer acquisition and expand its presence in additional countries. Since its inception in 2020, LemFi has experienced rapid growth by facilitating money transfers for diaspora communities in North America and, more recently, Europe. These communities send money to emerging markets across Africa, Asia, and Latin America.
The four-year-old fintech now boasts over one million active users who utilize its multi-currency accounts to transfer money to friends and family in countries such as Nigeria, Kenya, India, China, Pakistan, and 15 others. Recently, LemFi expanded into Europe through a partnership with embedded finance provider Modulr. This collaboration will help LemFi initiate operations until it secures its license next month, following the acquisition of a Republic of Ireland-based firm. With this expansion, LemFi—whose revenue is derived from transaction fees and foreign exchange spreads—now operates in 27 send-from markets and 20 send-to countries.
One of the key factors contributing to LemFi’s success is its robust fraud detection measures. A recent report indicates that individuals sending money abroad are nearly four times more likely to fall victim to financial fraud than those who do not.
LemFi co-founder and CEO Ridwan Olalere commented;
Fraud can significantly drive up costs. Higher costs often mean passing them on to customers through additional fees. We’ve managed to keep our fraud rate extremely low, allowing us to offer customers the best possible prices. We’ve built a brand and reputation in certain communities because of that, as well as our user experience, which makes our customers refer it to their friends. That has helped us differentiate and grow even faster than you would expect in such a competitive market.
Approximately 70% of LemFi’s earliest customers still use the platform, while 60% of its customer base remains active annually. When LemFi expanded into Asia last April, Olalere revealed that the fintech recorded over $2 billion in annual transaction volume in 2023. Fast forward to now, and the remittance platform is processing half that—$1 billion—in monthly payment volume. He attributes this surge to strong adoption in the Asian corridor, which generates $160 million in monthly transaction volume and is growing 30% month-on-month within its first year of launch.
Olalere also shared that the company has doubled its user base, revenue, and transactions over the past two years, which has played a significant role in attracting investor interest and confidence. This growth momentum led to a Series B funding round led by Highland Europe, a London-based growth-stage investment firm that supports startups with more than €10 million in annualized revenues.
The round, which closed in just four months, also saw participation from existing investors Endeavor Catalyst, Left Lane Capital, Palm Drive Capital, and Y Combinator, bringing LemFi’s total funding to $85 million. LemFi plans to use the new funding to extend its offerings, scale its payment network licenses and partnerships to provide hyper-localized services, and recruit talent for its next growth phase. The firm currently employs more than 300 people across Europe, North America, Africa, and Asia.
Olalere, who founded LemFi with CFO Rian Cochran, noted;
While regulations market by market remain complex and we have more stakeholders to deal with, scaling has become a lot easier for us because we have technology that is adaptable and can easily plug and play to different payment methods and schemes. So, we intend to go to as many markets as we have a significant number of immigrants, starting now with Europe this year, which is going to be a big focus for us.