Just one year after launch, peer-to-peer travel exchange service
WeSwap has raised $7.5m (£4.5m) in Series A funding.
Founded by Jared Jesner and Simon Sacerdoti in late 2013, London-based WeSwap was launched as the "social" way to get your money exchanged at good rates. It has now attracted the attention of IW Capital and EC1 Capital, which led the funding round together with investors that had already helped raise $2m (£1.2m) in seed funds.
The ever higher and more eye-watering fees most money exchange services charge (or hide in bad exchange rates) makes this an attractive prospect and investment. Rather than head to a third party, WeSwap works by synching customers up with other people that have the currency they need. They upload money into their WeSwap account with their own currency, select their travel destination, and a match is sought. If that match is someone the customer knows -- reached in some cases directly through email, Facebook, Twitter and LinkedIn - the service is free. But exchange costs are charged at only 1 percent. If no matches can be found, WeSwap will exchange your money for a 1.5 percent fee.
Customers retrieve their currency at ATMs or pay with a WeSwap prepaid MasterCard. There are no additional charges on using that prepaid card. This is a pretty big deal in itself, considering the flat fees or percentages many banks will add to any transactions carried out abroad on a card.
Right now, the startup needs to be able to scale -- it only operates in six currencies today, and will find it hard to battle the incumbents on that level. Particularly since it is focussing on the well-cornered holiday market. However it plans to expand to 16 currencies by the end of 2014, and the Series A funding round will go a way to supporting that. "The investment allows us to accelerate our growth across more international markets and to continue to bring great value and transparency to a market that has long suffered from opaque, confusing propositions," commented Jesner in a press release on the announcement.
Fintech startups have also focussed widely on the remittance space, so if WeSwap can get its currency numbers up, it will be one of the few that is specifically after the holiday travel market, matching outgoing and ingoing tourists with one another. The prepaid MasterCard takes a good few days to arrive in the post, and everything is based on digital transfers, so WeSwap is not looking for the airport exchange speedy service. Instead, it could provide a longterm alternative that people keep returning too, if successful.
This article was originally published by WIRED UK
