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Before getting into it, you can find Infuse Partner’s Q3 2025 letter here if you’re interested.
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One interesting company I looked at recently is Remitly Global. Led by a founder, Remitly, like its name implies, focuses on remittances. The definition of a remittance is just sending money between two people but the most common use case is someone working in one country and sending money back to their family in another country. The competitive advantage for Remitly is the payout network – the global partnership network of small shops and banks that allow the recipient to get physical cash. Remitly customers can get cash at 470,000 locations across 5,200 corridors. A corridor is a specific route – from the US to India for example. The company has created a dense network of integrations and presence at all sorts of cash-out locations across the world. For access to this network, Remitly charges roughly 2% to the sender. It’s essentially the digital-first version of Western Union.
And the company is starting to serve small businesses so they can pay international freelancers. Right now, Remitly has 8.5 million customers, and that is growing 20%, while the volume/customer increased 14% last quarter, due to the launch of B2B remittances.
Meanwhile, GAAP margins are just over breakeven, while adjusted EBITDA margins are quite strong. The main discrepancy is stock-based comp which is something to keep in mind as it’s roughly 4-5% of the market cap. The other thing to worry about is Wise Plc, a strong competitor in the UK. Wise’s strategy is to enable cross-border transfers while continuing to lower costs. So Remitly is often not even the cheapest option. And then the larger question about the inevitability of digital payments. If cash’s relevance is going down every year, that’s a huge long-term headwind for the company.
Remitly’s business long-term is not necessarily dependent on cash-out locations though. It currently is a huge advantage but digital remittances will certainly be the future. Wise is a strong competitor there but it makes up a tiny percentage of its current business. If Remitly can get to such a scale where it can be the lowest cost operator, then it could have a shot to hit escape velocity. On the other hand, stablecoin adoption is a potential headwind there as the fees are extremely low. At the end of the day, the stablecoins still have to be exchanged into digital currencies so the fees will get taken somewhere. If stablecoin offramps can reduce fees below 2%, then Remitly would be in trouble.
All that is to say that Remitly still has a shot at outsized success, especially since send volumes are $65 billion, growing 40%. But take-rate compression will ultimately affect the long-term margin profile. The migrant remittance market is huge so maybe focusing on it and B2B use cases will be plenty for this company to be 10x larger than it is right now. However, there are real obstacles in its way with potential competition and technological alternatives. I see real flickers of potential but it’s also not a scenario where I see the company inevitably dominating its space.