SendFriend, a New York-based blockchain startup specializing in international money transfer to the Philippines, has raised $1.7 million in pre-seed funding from a group led by MIT Media Lab, Mastercard Foundation, Ripple and Barclays.
Other investors include Techstars, Mahindra Finance, 2020 Ventures and 8 Decimal Capital.
The blockchain-based platform, set to launch service from New Jersey and expand to other U.S. states, will allow customers, mostly overseas Filipino workers, to transfer funds back home for about 65 percent less than what is currently on the market, according to David Lighton, co-founder and CEO.
He said the market opportunity is huge, with more than $34 billion in inflows, yet 80 percent of the fund transfer market is offline, despite a large percentage of unbanked consumers that use mobile phones.
“Our service is different from what’s available, because we are the only company there to leverage a blockchain technology in a commercial, regulatory compliant way,” he told Mobile Payments Today via email. “Our service enables real-time payments, with a mere 2.5 percent price tag, while the next cheapest thing is about 4 percent and requires the customer to wait three to five days, unless they choose to pay a premium for instant service.”
SendFriend is working with Ripple as its strategic partner on the funds transfer service, he added. Ripple’s XRapid service allows money to be transferred in real time across the globe.
Lighton decided to launch the company after working for the World Bank in Haiti after the deadly 2010 earthquake. He co-authored the National Financial Inclusion Strategy for the country, which involved how to deal with payments and remittances.
The company went through the Barclays Accelerator Program and founded at MIT, where Lighton got his MBA. The company got an MIT Legatum Fellowship and MIT Translational Innovation Alliance Award, leading to about $450,000 in cash grants and in-kind awards to help launch the firm.