A 7-year journey officially ends today (Tuesday), as the Israeli fintech startup Rewire, which develops a money transfer product for migrant workers, announced that it has been acquired by Remitly, a money transfer company. The American company will pay $80 million for the Israeli startup in a deal that combines shares and cash and is "the largest in its history."
A solution for migrant workers
Today, migrants who want to transfer money to their country of origin are forced to use solutions that involve high fees and don’t help to manage their finances either in the country where they work, or their homeland. Rewire’s solution addresses these difficulties; it allows the management of the day-to-day work of migrants in the country where they work and originate from. Thanks to the company's collaborations with banks, migrants can deposit funds into a digital bank account and use it locally, using a credit card issued by the company, or transfer funds to their country of origin. Rewire's application, which is available in 8 languages, currently allows approximately 600,000 migrant workers in Israel and dozens of European countries to send money to their families and make transfers at more than 1,000 deposit points at places like Super-Pharm, Postal Bank, and GMT branches.
Now, as mentioned, the company announced an acquisition deal, in which Rewire will become wholly owned by Remitly, one of the largest companies in the world in the field of digital financial services for migrants. Rewire employs 132 employees, of which 119 are in Israel and the other 13 are in its offices in the Netherlands; the company emphasized that all employees will continue to work even after the acquisition. Interestingly enough, about a third of the workers in Israel are migrant workers themselves, who provide support to other migrants from China, Thailand, the Philippines, Nigeria, India and more.
Rewire was founded in 2015 by Guy Kashtan (CEO), Adi Ben Dayan (VP R&D), Sa'ar Yahalom, (CTO) and Or Benoz. Since its founding, it has raised $62 million. In a conversation with Geektime Kashtan said that its long-term plan is to bring the Rewire brand under the well-known brand of the parent company while continuing to promote the various products for Remitly based on its capabilities, experience, and technology.
Over the years, about $62 million has been invested in Rewire. You are now selling it for $80 million. In similar sales transactions in the past, there were comments about a "disappointing exit", or a deal that only benefits first investors. How would you describe your feeling after the deal and the path you have taken so far?
Kashtan: "We are very satisfied with the acquisition sale. We prioritized the employees, shareholders, and customers. Right now, we are seeing companies laying off employees; they are downsizing or are recruiting at a very low scale. So, in our opinion, given the current market, this is a very big achievement– especially because it will actually allow us to recruit more employees, and enable amazing opportunities for them. Remitly is the most suitable company for us, a leader in our industry, our most significant inspiration and very focused on the well-being of its employees."
Kashtan added with the plan to enter new markets and continue the development of new financial services, the company will recruit dozens of employees in Israel during the coming year and will expand the team located in the office in Amsterdam, which centers its activities in Europe.