London-based fintech unicorn Zepz, formerly known as WorldRemit, has raised an impressive $267 million in funding, signaling its commitment to revolutionizing international money transfers.
This latest round was led by Accel, with significant contributions from Leapfrog, TCV (known for its investments in companies like Qonto and Celonis), and Coller Capital.
In a noteworthy addition, the International Financial Corporation (IFC), a member of the World Bank Group, plans to invest up to $20 million, further underlining the confidence in Zepz’s growth trajectory.
Zepz’s latest funding round comes on the heels of a robust $292 million raised during its Series E round in 2021. This capital injection was pivotal for the company, enabling it to acquire Sendwave, a cross-border payment firm, and subsequently rebrand itself.
The fresh funding will be directed toward expanding Zepz’s operational capabilities and business reach, particularly beyond its established markets in Africa.
“Investors are not in a hurry to join the public markets,” noted Harry Nelis, a partner at Accel. This sentiment resonates with Zepz’s decision to pause its plans for an initial public offering (IPO) amidst a turbulent market environment.
Zepz’s online cross-border payments platform now covers 150 countries, allowing users to send money to friends and family overseas effortlessly through computers, smartphones, or tablets. This service stands as a low-cost alternative to traditional money transfer companies that often rely on high street agents and levy substantial fees.
The platform also offers various options for money transfers, including bank deposits, cash collection, mobile airtime top-ups, and mobile money services. Such versatility makes it a convenient choice for users seeking secure and affordable methods to support their loved ones abroad.
Headquartered in London, Zepz has established regional offices in various countries beyond the United States, including South Africa, Uganda, Kenya, Rwanda, Tanzania, and Zimbabwe. This strategic positioning allows the company to serve a diverse clientele and cater to the unique needs of different markets.
Despite its previous valuation of $5 billion in 2021, the current valuation of Zepz remains undisclosed. Nevertheless, the company claims to have reached full profitability in 2022, an impressive feat given the challenges faced in the fintech sector.
However, in early 2023, Zepz made headlines by laying off more than 26% of its workforce, letting go of approximately 420 employees from a total of around 1,600. This reduction was part of a broader restructuring effort, which continued later in the year with an additional 30 job cuts.
Mark Lenhard, Zepz’s CEO, highlighted the company’s resilience in times of crisis.
“We certainly saw it during COVID. We’ll see it when there’s an earthquake. We’ll see it when there’s geopolitical unrest in the country. More money will flow in because people get concerned about their families, about their communities, and that’s their time of need,” he remarked.
The incredible story and journey of WorldRemit/Zepz
Ismail Ahmed the founder, was born in Somaliland, a region that declared independence from Somalia in 1991 but has struggled for international recognition. His early life was marked by struggle and survival. During the civil war in 1988, Ahmed was smuggled out of Hargeisa in a tipper truck. He escaped the turmoil of his homeland, eventually making his way to the UK.
Ahmed’s first-hand experiences with remittances began when he was sending money to his family, who had relocated to a refugee camp in Ethiopia. The process was not only slow and expensive but also unreliable. This period, when Ahmed worked odd jobs like strawberry-picking, shaped his deep understanding of the systemic problems in money transfer services, especially for migrant workers.
After settling in the UK, Ahmed pursued his education, studying economics and earning a PhD and later an MBA from London Business School. He gained a deep understanding of global finance and remittances. In the early 2000s, he landed a job at the United Nations Development Programme (UNDP) as a compliance advisor, where he worked with remittance programs in Somalia and East Africa. It was here that he became aware of widespread corruption in remittance programs, a discovery that would dramatically change his career trajectory.
The turning point in Ahmed’s story occurred during his time at the UN. He uncovered fraudulent activity within the UN’s Somalia remittance program. When he confronted his superiors, he was met with threats to his career and reputation. His boss warned him that pursuing this path would make it impossible for him to work in remittances again.
True to the warning, Ahmed lost his job when he decided to blow the whistle on the corruption. The UN, an organization he initially hoped would be a force for good, became his antagonist—a large, bureaucratic system that punished him for trying to expose wrongdoing.
Ahmed did not back down. In 2010, after a long battle, he received £200,000 in compensation from the UN for the unfair treatment he endured. This payout would be the seed capital for his entrepreneurial journey. Despite the personal and professional costs, Ahmed had laid the foundation for the next stage of his life.
The birth of WorldRemit
Drawing from his own experience as both a sender and receiver of remittances, Ahmed realized that the traditional method of money transfer—using agents, middlemen, and physical locations—was costly, inefficient, and time-consuming. The business model was ripe for digital innovation, especially in the era of smartphones and mobile wallets.
In December 2009, as he received his compensation from the UN, Ahmed registered his company, originally named AfricaRemit, which later became WorldRemit. His vision was clear: to make sending money internationally easy, affordable, and accessible using mobile technology. By cutting out agents and physical offices, the service could reach more people and drastically lower transaction costs.
Somaliland, where Ahmed had deep ties, became WorldRemit’s first market. The region had embraced mobile technology early, which made it an ideal testing ground for his innovative model. After success there, Ahmed set his sights on other markets and by 2010, WorldRemit was expanding globally.
WorldRemit began attracting significant attention from investors. From 2010 to 2013, the company received £6.2 million from seed investors. As the business grew, so did interest from larger venture capital firms. In 2014, WorldRemit secured £33 million in Series A funding from Accel Partners, followed by £82 million in Series B from Technology Crossover Ventures (TCV) in 2015, and a further £37 million in 2016. The company’s growth was driven by the increasing demand for digital remittances, particularly in developing countries.
Becoming a unicorn and facing new challenges
In 2021, WorldRemit made a significant leap by acquiring Sendwave, a mobile remittance service focused on Africa. This acquisition allowed the company to expand its operations and market reach, particularly in the developing world. Following this, WorldRemit rebranded itself as Zepz to reflect its broader mission and portfolio of cross-border payment services, while still maintaining the WorldRemit and Sendwave brands. The rebranding marked a climactic moment in the company’s history, as it was now valued at $5 billion and had achieved unicorn status—a remarkable feat for a Black-founded fintech company.
During the COVID-19 pandemic, Zepz’s services became even more crucial. The global economic uncertainty, coupled with increased demand for digital remittance services, caused a surge in usage. Ahmed’s company helped migrants send money home at a time of unprecedented need, positioning Zepz as a leader in the industry.
In 2022, Ahmed transitioned from CEO to non-executive chairman, handing over day-to-day operations to a new leadership team. This period also saw the company become fully profitable for the first time. However, it also marked a time of significant layoffs and restructuring. As Zepz scaled down operations, over 26% of its workforce was laid off.
The Challenges of Scaling
The integration of Sendwave posed both opportunities and challenges. The company made job cuts, not just due to overlapping roles but also as part of a broader strategy to streamline operations. This was part of the cost-cutting efforts after Zepz reached profitability in 2022.
Despite achieving profitability, Zepz faced tough market conditions in 2023 and beyond, as many digital payment companies struggled with the economic downturn and tightening financial regulations. Competition from other digital remittance services and the slowdown in digital payments further pressured the company to innovate while managing costs.
In parallel with his business success, Ahmed also turned his attention to philanthropic efforts. In 2021, he launched the Sahamiye Foundation, committing $500 million of his own wealth to entrepreneurial and educational development in Somaliland. His goal was to improve literacy rates, support startup accelerators, and drive technological and vocational education, moving beyond traditional aid models.
Although Ahmed stepped back from direct leadership at Zepz, his impact continues both in the fintech world and in Somaliland. His journey from a refugee in a war-torn country to a global fintech leader symbolizes resilience and innovation.
