Remitly aims to raise up to $294M at nearly $7B valuation in IPO for Seattle fintech giant

(Remitly Images)

Remitly set terms for its IPO on Tuesday.

The fintech company is aiming to raise up to $294 million, which would be one of the largest IPOs for a Seattle-area tech company.

Shares are expected to be priced between $38 to $42, valuing Remitly at potentially more than $6.7 billion. Remitly’s last valuation was $1.5 billion in July.

Founded in 2011, Remitly’s mobile technology lets people send and receive money across borders, including immigrants in the U.S. and U.K. who support families back home in countries such as the Philippines, India, El Salvador, and others. The service eliminates forms, codes, and agents typically associated with the international money transfer process.

The company posted $202 million in revenue and a $9.2 million net loss in the first six months of this year. It generated $257 million in revenue and a $32.5 million net loss in 2020, doubling its annual revenue and cutting its loss nearly in half.

Jason Stoffer, a Seattle-based venture capitalist with Maveron known for his “teardowns” of IPO filings, analyzed Remitly’s business metrics last week. Stoffer, who decided not to invest, said the company proved him wrong. He expects Remitly to reach $600 million in revenue next year, noting its “superior business model to legacy companies” such as Western Union and MoneyGram.

Remitly competes against a number of other cross-border money transfer companies, including Wise (formerly TransferWise), which was valued at $11 billion after going public via direct listing in July, and Zepz (previously WorldRemit), which raised $292 million in a Series E funding round last week.

Investor interest in these companies reflects the growth opportunity for digital remittances. Remitly said the market for global money transfers was estimated at $1.5 trillion in 2020. It said its business and the digital financial services industry as a whole has accelerated as a result of the pandemic.

It will trade under the ticker “RELY” on the Nasdaq.

Remitly CEO Matt Oppenheimer helped come up with the idea for Remitly while working for Barclays Bank in Kenya. He founded the company in 2011 with Josh Hug and Shivaas Gulati; the original name for the startup was Beamit Mobile.

The company’s largest shareholder is Prosus’ PayU with a 23.9% stake, followed by Stripes (12.1%) and Threshold Ventures (9.4%). Seattle-area firm Trilogy Equity Partners has a 6.2% share. Oppenheimer has a 4.8% stake, while Hug has 3.1%.

There are 11 other Washington state companies that have gone public this year, both via traditional IPO and a SPAC deal. Sana Biotechnology had the largest to date in 2021, raising $587.5 million.

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