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Robotic Automations

Inside LemFi’s play to be fintech to the Global South diaspora | TechCrunch


The African tech ecosystem, buffeted by huge potential but also lots of economic, political and social instabilities, is no stranger to major drama befalling even its most promising-looking startups. But recently, LemFi, the Nigeria-based fintech that provides money transfer services to African migrants, is shaping up as an example of a bounce-back—and growth story. After being shut down by regulators in Ghana in November over what was described as “illegal” activities, LemFi is back in business in the country, and it’s now gearing up for a big expansion into Asia.

These events spotlight the company’s growing influence in Africa’s remittance market, fuelled by a $33 million Series A funding round and the launch of services in the U.S. corridor, both announced last August.

Backed by the likes of Left Lane Capital and Y Combinator (where it was part of the Summer ’21 cohort as Lemonade Finance), LemFi initially targeted Nigerian migrants in Canada, offering multi-currency accounts that enabled them to send money back to their home country.

LemFi later expanded to serve other African diaspora communities in the country before entering the U.K. market in 2021 by acquiring RightCard for $2.5 million. By the end of 2023, immigrants in these three countries could send money to 10 African destinations, including Nigeria, Kenya, Ghana, Senegal, Ivory Coast, Benin Republic, Cameroon, Tanzania, Rwanda, and Uganda.

From serving immigrants from Africa to Asia

In a further expansion move last month, the money transfer service broadened its options and customer base to include migrants from Asian countries residing in the U.S., U.K., and Canada.

“Since starting the company three years ago, we’ve realized that remittances across so many regions are more similar than people think,” LemFi co-founder and CEO Ridwan Olalere told TechCrunch in an interview. “The problems that Africans face in terms of difficulty in sending money and compliance issues are very similar to what people from different emerging markets also face.”

Although developing economies are doing what their name says — developing — money transfers continue to be an important cornerstone of how residents in these countries survive financially. Remittance inflows globally surpassed $669 billion in 2023, according to research from the World Bank, and many low- and middle-income countries heavily rely on these funds to address fiscal shortfalls. For some countries, these inflows continue to represent significant portions of their gross domestic product (GDP).

Despite concerns about migrants’ incomes declining due to global economic challenges, remittances to their home countries, particularly across Africa and Asia, are expected to continue growing. According to the World Bank, remittances to these regions increased by 3.8% last year.

All this has long been a prime opportunity for newer fintech players. Navigating unfamiliar banking systems in their new countries, dealing with the complexities, costs and unreliability of sending money home using traditional options like incumbent banks, Moneygram, and informal operators, are common challenges for immigrants. That has created an opportunity for more modern remittance startups, which have gained traction by offering better fees and more convenient sending options, leaning into mobile phone technology and other innovations.

LemFi said that since its inception, it has acquired over a million customers. But its more recent expansion into the U.S., the largest source of remittances globally, positions it to attract significantly more customers and revenue. And its expansion to serving Asian communities is likely to be the other main driver: While Nigeria, one of LemFi’s main “receive” markets, is among the top 10 recipient countries globally, India and China receive two to five times more in remittances. (India received $125 billion in remittances in 2023, whereas Nigeria received only $20 billion.)

Hires to drive product localization

Such data clearly influenced LemFi’s Asian expansion strategy, which will initially focus on India, China and Pakistan transfers from the U.S. That will also open the door to other challenges, say the founders.

“The most challenging aspect for a remittance company isn’t just adding new corridors, but managing compliance and fraud. Once addressed, particularly on the send side, expansion across multiple regions on the receive side becomes feasible,” explained Olalere, who co-founded the company with Rian Cochran. Both founders were former colleagues at Chinese-backed African fintech unicorn OPay.

Olalere notes that while it is crucial to address compliance issues on the “send” side (the U.S., the U.K. and Canada), it’s equally important not to overlook compliance challenges on the “receive” side. These issues revolve around the regulatory requirements of different countries regarding inbound remittances, often necessitating specific licenses and local partnerships.

To expand its money transfer services into India, LemFi has enlisted the expertise of Philip Daniel, a former director at TerraPay, one of the well-known remittance infrastructure companies globally. Additionally, Daiyaan Alam, formerly leading partnerships at Delivery Hero subsidiary Foodpanda in Pakistan, is spearheading LemFi’s expansion efforts into Pakistan and South Asia. They join Allen Qu, former COO at Chinese-backed African fintech OPay, who leads the fintech’s growth among the Chinese diaspora.

LemFi will rely on its regional hires and local expertise to attract users as it enters the Asian diaspora market, competing against established players like Zepz, Wise, Remitly, and Sendwave. The executives, in conversation with TechCrunch, asserted that LemFi stands a strong chance of capturing a significant market share despite that. Not only do they believe that LemFi has a better understanding of local customers and their preferences, but the larger addressable market remains largely untouched by any of them: many immigrants still turn to incumbent banks and private agents to send money.

Still a long road ahead

In addition to setting dedicated teams in each Asian market, LemFi, with over 250 employees across 10+ countries, has localized its apps and website in different languages, including Chinese, Hindi, and Urdu. Similarly, LemFi has opened new corridors in some parts of Europe so its migrant users in the U.S., the U.K., and Canada can send money to family and friends who are in France, Belgium, Spain, the Netherlands, Italy, and Belgium. “We’re set to make a second acquisition soon in the region, and that’ll allow us to expand even further and give us operational efficiency,” Olalere remarked.

LemFi users can now make money transfers across 20+ countries, although its reach still falls short of some competitors whose users have access to over 80 countries. Nonetheless, LemFi has made significant strides in providing its services to sub-Saharan Africans in the diaspora. Last year, LemFi, which earns money from transaction fees and foreign exchange spreads, recorded over $2 billion in annual transaction volume. Olalere also claims that the startup is profitable and that 60% of its users are active monthly.

“The markets we serve will continue to need millions of immigrants yearly, so we want to be one of the first products introduced to the African, Indian, Chinese, or Pakistani communities,” remarked Daniel, the company’s global expansion lead. “There are still ample opportunities for us to grow.”


Software Development in Sri Lanka

Robotic Automations

Tesla is laying off more than 10% of its global workforce | TechCrunch


Tesla is laying off thousands of workers as it tries to simultaneously cut costs and boost productivity, according to CEO Elon Musk.

The electric automaker is cutting “more than 10%” of its global headcount, Musk said in an email reported by Electrek and Bloomberg News. Tesla finished 2023 with over 140,000 employees, meaning the cuts could impact more than 14,000 people.

The layoffs come just two weeks after Tesla announced its first year-over-year sales drop in years, amid a wider cooling of EV sales. The company has warned investors that sales growth could be “notably lower” in 2024 than its stated goal of growing 50% each year. It’s also somewhat in between product cycles for the first time in a long time, with the expensive Cybertruck only just recently going into production and the popular Model Y entering its fourth year without any significant updates.

“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk said in the email. Tesla’s growth, he said, has led to “duplication of roles and job functions in certain areas.”

“As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle,” Musk wrote.

Tesla shipped a record 1.8 million EVs in 2023. But the company spent much of the year slashing prices on its most popular models in an effort to counterbalance high interest rates and increased global competition. Tesla reportedly dropped — or at the very least, delayed — plans to build a lower-cost EV starting at around $25,000, opting instead to use the underlying platform being developed to power an alleged robotaxi that Musk said will debut on August 8th.

 


Software Development in Sri Lanka

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