LONDON (Reuters) - WorldRemit will be the exclusive money transfer partner for international call provider Lebara under a deal announced on Tuesday by the London-based brands, which are popular among immigrants to Europe.
Lebara offers mobile phone services via shops in six European countries, while WorldRemit enables immigrants to use digital remittances to send money home to families and friends, offering an alternative to more expensive options from firms such as Western Union (WU.N) and MoneyGram (MGI.O).
More than 3 million users of Lebara’s calling and mobile money services will now have access to WorldRemit payment services on Lebara’s site and mobile app. The company operates in Britain, Denmark, France, Germany, the Netherlands and Spain.
For WorldRemit, the partnership promises to accelerate its growth by giving it access to Lebara’s network of 275,000 franchises and independent retailers, WorldRemit Chief Executive Ismail Ahmed told Reuters. It had 2.7 million active users in the last year and aims to reach 10 million by 2020.
The deal, the terms of which were not disclosed, follows months of restructuring by Lebara, which has faced competition from free messaging services such as Facebook’s WhatsApp.
It was acquired last September by Swiss family office Palmarium, a private equity and real estate investment firm.
“We can bring something to WorldRemit and WorldRemit can bring something to us,” Graeme Oxby, who joined Lebara as its CEO following the Palmarium acquisition, told Reuters in a telephone interview.
Oxby is a telecoms veteran who served as managing director of both Virgin Mobile and Three in Britain before becoming head of Liberty Global’s European operations.
Lebara has been the subject of recent media reports that questioned the departures of former executives and its progress in disposing of non-core businesses.
In its 2017 results last week, Lebara updated previously announced plans to exit its non-mobile businesses and to build up repeat customers rather than one-off pay-as-you SIM card buyers. Oxby said the partnership, under with most of Lebara’s existing remittance customers will be transferred to WorldRemit, demonstrates the progress Lebara is making.
“We see the WorldRemit services really being the dominant portion of our money-related activities,” Oxby said.
WorldRemit is paying Lebara an upfront fee to complete the partnership, a spokesman said. The deal involves paying Lebara for referring customers its way and an incentive scheme for Lebara shop owners to sell the co-branded remittance services.
WorldRemit has raised $220 million since its founding in 2010 from investors including Accel Partners, LeapFrog Investments and Technology Crossover Ventures (TCV). William Blair acted as a financial adviser to WorldRemit.
Reporting by Eric Auchard in London; Editing by Alexander Smith