Money transfer startup Remitly raised $85 million at a valuation of $1.5 billion.

Immigrant focused remittance fintech Remitly announced Wednesday that it raised $85 million in a Series F round led by existing investor Prosus’s PayU. Generation Investment Management, Owl Rock Capital, Stripes, DN Capital, Top Tier, Princeville Global, and Threshold Ventures also participated. (GeekWire)

At a valuation of $1.5 billion, the round catapulted Remitly into unicorn status – the hallowed group of startups with a valuation of $1 billion or more. Previously in July, Qumulo, a startup that helps companies create and manage huge amounts of data, announced the successful raising of $125 million in a Series E round led by funds managed by Blackrock (NYSE: BLK). It garnered a valuation of $1.2 billion.

That makes two startups from Seattle that won their horns this month.

Sharp growth during the pandemic

Remitly uses mobile technology to allow its immigrant customer base to send money home very inexpensively compared to international money transfers by Western Union (NYSE: WU) or Moneygram (NASDAQ: MGI).

The startup said it raised the funds to fuel its growth following a surge in demand for electronic remittances during the COVID-19 pandemic.

“As the current health crisis continues to devastate the global economy and disproportionately impact developing countries, immigrants are increasingly turning to digital solutions to address their financial needs and ensure they are still able to send critical funds home to their loved ones,” said Matt Oppenheimer, Remitly Co-founder and CEO in a statement.

Remitly said its customer base grew 200% year-on-year in the face of a decline in global remittances of 20% projected by the World Bank due to the virus-related economic crisis.

It ascribed the reason for growth to the limited access to traditional remittance providers during the pandemic due to quarantines and closure of physical service outlets and branches.

Time to double down on investment in Remitly?

Long-time Remitly investor PayU’s CEO Laurent le Moal said to PaymentsSource that Remitly sent money to customers served by PayU in developing regions of the world. Remitly had a mission to help immigrants and their families.

“If you believe in Remitly’s story, and we do, then this is the time to ‘double down’ on your investment in them and we did that.”

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