Zepz, which owns the WorldRemit and Sendwave manufacturers, has a complete headcount of round 1,600.
Sopa Images | Lightrocket | Getty Images
LONDON — Zepz, the proprietor of cash switch companies WorldRemit and Sendwave, is on the hunt for mergers and acquisitions after chopping 26% of its workforce final month, the corporate’s CEO instructed CNBC.
With a $5 billion valuation, Zepz is likely one of the largest fintech firms in Europe, backed by main buyers together with Accel, TCV and Leapfrog.
The firm allows customers to ship cash from a smartphone or laptop to folks overseas, who can obtain it of their checking account, cellular pockets, or as a cellular airtime top-up.
The service is a challenger to giant banks and established cash switch providers like Western Union, touting cheaper charges and the flexibility to maneuver funds quickly. A detailed rival is Wise, which additionally claims to supply cheaper worldwide cash transfers than banks.
Mark Lenhard, Zepz’s CEO, mentioned the agency needed to develop its portfolio of companies in an effort to personal a bigger a part of the worldwide digital funds pie.
Lenhard did not establish which firms Zepz was seeking to purchase, however mentioned the sharp droop in non-public fintech valuations made it a horny time to kick off M&A exploration.
Digital wallets
The general worth of cross-border funds is forecast to extend from $150 trillion in 2017 to over $250 trillion by 2027, in keeping with the Bank of England. It’s a extremely aggressive trade with varied gamers working and taking a slice of every transaction a client makes.
A selected focus for Zepz product-wise within the close to time period is digital wallets, Lenhard mentioned, with the corporate planning to launch its first digital pockets “imminently.”
“We want to be a core financial hub for a very particular segment,” he instructed CNBC Wednesday, with a selected give attention to migrant communities sending funds house.
The push into M&A is a shock transfer in some ways because it follows a major quantity of value discount on the 13-year-old firm. In May, Zepz laid off 420 workers, equating to about 26% of its world workforce.
Zepz says it lower the roles to consolidate its operations after its acqusition of U.S. remittances agency Sendwave led to a duplication of sure roles.
Still, on the time, Zepz mentioned it wasn’t pausing hiring, and was actively attempting to fill 200 roles.
It marked the second time in just below a 12 months Zepz laid off employees. In June 2022, Zepz lower round 5% of its workforce, in keeping with Sky News.
“Any time you’re laying off individuals it’s hard, it sucks, but it was certainly the right thing to do. We’ve expanded things out of that,” Lenhard mentioned Wednesday.
He added that he hopes the corporate’s upcoming digital pockets product will persuade clients to rely extra on Zepz, slightly than utilizing competing digital banks and different monetary apps which have grown their providers to supply a a lot wider vary of merchandise.
PayPal, for instance, gives customers cellular wallets, the shopping for and promoting of cryptocurrencies, and purchase now, pay later installment loans, amongst different issues.
Like different fintechs, Zepz has been in cost-cutting mode because the trade faces enormous strain from a droop in expertise valuations, stoked by a number of macroeconomic headwinds together with increased inflation and rates of interest.
Despite this, Zepz says it has been much less inclined to these financial pressures than different companies within the area. World remittances is much less impacted by broader macroeconomic pressures than, say, banking, in keeping with Lenhard.
Zepz’s general buyer transactions are up 25% year-to-date as of April 2023, the corporate mentioned, whereas its buyer development accelerated to 30% on common and by as a lot as 80% in sure areas.
The firm, which hit month-to-month profitability within the first half of 2022, desires to attain profitability on a full-year foundation this 12 months.
WATCH: ‘Sea of sameness’: Are smartphone makers out of concepts?
Source: www.cnbc.com”