Google and Goldman Sachs are among the firms that have invested in the enterprise-payments start-up Veem in its latest fund-raising round. Veem is leveraging Bitcoin to connect its clients’ bank accounts with the suppliers.
Banking giant Goldman Sachs along with technology giant Google has invested in Veem, a global payments solution provider, in its recent effort to raise funds. Google participated in the funding through GV (formally Google Ventures), the venture capital arm of Alphabet Inc. Alphabet Inc. is the parent holding company of Google. The other firms that participated in the funding round include Kleiner Perkins, Silicon Valley Bank, Trend Forward Capital, and Pantera Capital. A fund of $ 25 Million has been raised in the current series by Veem.
The San Francisco based firm was founded in 2014 by Marwan Forzley. The company has grown exponentially and from serving 590 customers in May 2015, the firm today has more than 80,000 customers in 96 countries.
Veem uses the Bitcoin blockchain to move the money for its customers around different geographies, eliminating the intermediary banks. The solution does not require the sender or receiver to hold the cryptocurrency. An algorithm routes the money through the most efficient payment rail.
“What’s important about this round is the acknowledgement of the size of the opportunity, the size of the market, the size of the pain point that we’re solving for,” said Forzley. “And it’s an endorsement of the growth that we’re experiencing.”
The firm had raised its first round of venture capital in May 2015 and $24 Million series B in March 2017. Veem intends to utilize the funds raised for new partner integration. Forzley’s earlier venture eBillme was acquired by Western Union in October 2011.
Growing Remittances Market
According to the World Bank, the global remittances market is steadily increasing having clocked $ 613 Billion in 2017. The market is expected to grow by 4.6% in 2018. The average fee for sending $ 200 in the first quarter of 2018 was 7.1% and 9.4% for remittances to the sub-Saharan African countries. With blockchain technology providing faster, cheaper and reliable means of money transfer, start-up firms like Veem and BitPesa have been quick to leverage the technology. This has been achieved by coming up with solutions that have considerably brought down the fee paid by customers while reducing the average time for settlements from days to minutes.
Capitalizing the Opportunity Through Blockchain Start-Ups
Big banking institutions like Goldman do not want to be left behind. The company through its Principal Strategic Investment Group has been backing blockchain companies that can help the bank provide better services to its customers. In addition to Veem, it has also invested in enterprise software developer Digital Asset Holdings, payments start-up Circle and infrastructure provider Axoni.
GV’s investments, other than Veem include distributed cloud start-up Storj, commodities trader LedgerX and central bank alternative Basis. Veem could be the first Bitcoin start-up to go public, as per Karim Faris, GV general partner. Google’s growing interest in blockchain start-ups could be the reason for its recent decision to reverse its earlier cryptocurrency and ICO related ad ban.
With the maturing of blockchain technology over the last couple of years, start-ups like Veem and BitPesa are mushrooming across the globe to compete for the growing remittances market. Not to be left behind, technology and banking giants are betting on the ever-increasing sector through strategic investments like in the case of Veem.
Do you think with giants like Google and Goldman Sachs backing an enterprise payments start-up will result in more banks and tech companies jumping in the fray? Let us know in the comments below.
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