Ripple, together with Barclay’s tech accelerator and other investors, have backed a $1.7 million round for a new remittance startup, SendFriend. The startup will utilize XRP cryptocurrency to transfer funds internationally.
The New-York firm also announced on Monday the participation of MIT Media Lab, Mastercard Foundation, Mahindra Finance, Techstars, 8 Decimal Capital, and 2020 Ventures in the round. Barclays acquired a stake through its “Barclays powered by TechStars” accelerator program. SendFriend was accepted in the program last September.
SendFriend’s co-founder and CEO David Lighton said that the funding will be used for hiring staff, concentrating on community engagement, and marketing.
The firm aims to offer services to overseas workers from the Philippines, utilizing XRP and Ripple’s xRapid product for cross-border payments.
“XRP is used as a liquidity vehicle for cross-border payments, enabling SendFriend to circumvent the corresponding banking system and convert USD to XRP to PHP [Philippine peso] in a matter of seconds,” the firm explained.
SendFriend is not yet live but said it looks forward in launching in New Jersey soon and will be available in other U.S. states as well via desktop and mobile apps.
In a release last week, Ripple stated that SendFriend will indeed use the XRP cryptocurrency. “The existing correspondent banking system is slow, inefficient and costly,” Lighton expressed at the time.
Since blockchain “replaces the frictions and fees of the banking system,” SendFriend said through its funding announcement that it will have 65 percent lower fees than regular international fiat transfers.
Meanwhile, the Philippines’ House of Representatives purportedly approved a bill last week that seeks to grant overseas Filipino workers (OFWs) a 10-50 percent discount on remittance fees, depending on the amount transferred.
According to a World Bank Report last December, the Philippines is one of the biggest remittance markets in Asia. Last year alone, the country sent $34 billion back home.