$5 billion fintech Zepz looks to take on rivals like PayPal with digital wallet, M&A plans
LONDON — Zepz, the owner of money transfer firms WorldRemit and Sendwave, is on the hunt for mergers and acquisitions after cutting 26% of its workforce last month, the company's CEO told CNBC.
With a $5 billion valuation, Zepz is one of the largest fintech companies in Europe, backed by leading investors including Accel, TCV and Leapfrog.
The company enables users to send money from a smartphone or computer to people abroad, who can receive it in their bank account, mobile wallet, or as a mobile airtime top-up.
The service is a challenger to large banks and established money transfer services like Western Union, touting cheaper fees and the ability to move funds rapidly. A close rival is Wise, which also claims to offer cheaper international money transfers than banks.
Mark Lenhard, Zepz's CEO, said the firm wanted to grow its portfolio of businesses in an effort to own a larger part of the global digital payments pie.
Lenhard didn't identify which companies Zepz was looking to buy, but said the sharp slump in private fintech valuations made it an attractive time to kick off M&A exploration.
The overall value of cross-border payments is forecast to increase from $150 trillion in 2017 to over $250 trillion by 2027, according to the Bank of England. It's a highly competitive industry with various players operating and taking a slice of each transaction a consumer makes.
A particular focus for Zepz product-wise in the near term is digital wallets, Lenhard said, with the company planning to launch its first digital wallet «imminently.»
«We want to be a core financial hub for a very particular segment,» he told CNBC Wednesday, with a particular focus on migrant communities sending funds home.
The push into M&A is a surprise
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