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Much of the world froze in uncertainty last spring, and Silicon Valley was no exception. It was a time when many of us were trying to make sense of it all, pausing investments and taking stock of our portfolios, all while working exclusively from home.
Around that time (and in between shifts as a pre-K and first grade teacher), I had the good fortune to get an introduction to Michael Faye. Michael was a two-time founder who had previously founded GiveDirectly and Segovia, both organizations committed to global impact and easing the burden of sending money into often overlooked places. He was at the helm of a new venture called Taptap Send.
It was a memorable meeting not only because it took place at the beginning of shelter-in-place orders (one of those first Zoom meetings), but also because of the company’s clear mission to do good in the world. Taptap Send’s ultimate goal is to build a financial product to make it easier and cheaper to send funds home to family and friends.
Taptap Send is a financial product company leveraging technology to expand the market for global remittances. The company has a nuanced, yet powerful strategy that Michael has put into place to allow the company to be the lowest-cost provider in every market they enter. As the world rapidly shifts toward digital wallets and e-money, it creates an opportunity for remittance companies to create an even more magical experience by sending funds directly to those wallets. Taptap Send gives as much of cost savings as possible to the customer, and as a result, is almost always the cheapest player in the market. All of that makes it economically viable to send smaller remittances – and in doing so, expands the total market and volume of remittances sent. This approach is strongly resonating with customers, as Taptap Send’s massive growth has been 90+% organic.
This approach aligns very closely with our thesis around investing in financial product companies like Taptap Send. There’s more to come on this at a later date, but the quick version is that the most valuable companies are able to expand the market for a financial service by either: (1) using technology to either truly reduce the cost to serve a customer in their market and/or (2) providing a significantly better customer experience.
By virtue of an upfront technology investment that does one (or both) of the above, a company expands the market. We see this already happening in other fintech categories like renters insurance and companies like Lemonade, stocks and Robinhood, life insurance and Ladder, car insurance and Hugo – and it’s exactly the case with global remittances and Taptap Send. We believe more remittances will be sent because of Taptap Send and its strategy to enable smaller money size sends.
Fast forward a year from that initial meeting, and we’re proud to announce that Canaan has led Taptap Send’s Series A round. It was one of the fastest-growing companies in our portfolio in 2020, growing 5x – and has been delivering on exactly what Michael pitched in our initial meeting.
While global remittances are expected to rise a modest 5.6% in 2021 (World Bank), the outlook beyond that remains uncertain as we all try to put COVID in the rearview mirror. What is clear is that the average cost to send money will influence volumes more than ever.
By bringing down the cost of remittances for its customers, Taptap Send is achieving its mission and increasing capital inflows to places that need it most. In today’s world of increasing need and income inequality, we’re proud to support the company’s purpose and set of values, especially now when the impact of getting money home is so significant. We believe, even more today, that the sky's the limit for Taptap Send.