This week I’ll be giving my presentation on Veem, a business-to-business platform for exchanging money internationally. While I plan to go much more in-depth on Wednesday, I thought that this blog post would serve as a nice supplement for information. As I hope that you’ll see both here and in class, Veem is a rapidly growing company with a lot to be excited about.
Veem was founded in April 2014 by Marwan Forzley and Aldo Carrascoso, with the former now serving as CEO. However, it originally existed as Align Commerce until March 2017, at which point they rebranded to the current name. This was done with the intention of sounding more clean and appealing to users. They also wanted something that could be used as a verb: if a business wants to send money around the world, they can now “just Veem it” whenever they want. (Doesn’t that have a nice ring to it!)
The company is currently headquartered in San Francisco and has about 75 employees. They raised a seed round of $1.5 million in April 2015, followed by a Series A round of $17.5 million in November of the same year. Finally, they closed their Series B round of $24.5 million in March 2017, all for a total of about $43.5 million in funding.
In terms of the product, Veem’s platform operates through membership, where each business signs up with its various details and banking information. Users can then transfer capital wherever they want, and without having to worry about different currency rates. All foreign exchange processes are handled in the background, and because financial information is already logged, businesses can simply interact with usernames or email addresses.
So it’s Venmo for international businesses?
Well… Sort of.
The underlying concept of quick and easy monetary exchanges is the same. Aside from that, though, the two entities are pretty different.
First, Veem uses a unique “multi-rail” technology that allows it to find the fastest route for moving money. I’ll go more into this during the presentation, but the main result of that is their use of blockchain as a link between two bank accounts. Whether it’s Venmo or other competitors like Zelle and PayPal, no one else can do this at the same level of efficiency or expertise.
Along with that, Veem does not charge fees to either the sender or recipient in a transaction. Instead, they take a 1.5-2% spread on the given exchange rate and make money through the difference in currency values. Such an approach vastly differs from that of Venmo and other competitors, who charge their users with credit card and merchant fees. This makes Veem’s business model much more attractive and cost-efficient for its members.
Lastly, the two focus on entirely different demographics: in the context of age, Veem skews towards older populations and those who solely need to get work done. On the other hand, Venmo favors younger people and those who use it more loosely (as we see in their social media element). Moreover, Veem primarily works with small and medium-sized businesses, whereas Venmo almost completely revolves around individuals. I’d like to expand a little bit more on this last point, since I won’t have much time to do so in the presentation.
Bringing SMBs up to Speed
If you’re an enormous business, you likely already have a well-established network for moving money between countries. On the other end of the spectrum, if you’re a tiny shop or startup, you probably never need to make international payments anyway. But what about everyone else in the middle? How do they go about crossing borders with their capital? As it turns out, financial wiring for small to medium-sized businesses is both shockingly outdated and painfully slow.
When a company wants to transfer money overseas, what normally happens is that it moves through a series of intermediary banks. I plan to explore this more on Wednesday as well, but they essentially exist to secure and transfer the funds in different ways (whether it’s between countries, currencies, or regulations). Yet, not only is this process extremely inefficient, but each of these intermediaries also has its own fees for providing service. These can quickly add up and prove very costly for the parties involved. By the time the transaction is over, then, most SMBs end up feeling like these chameleons with Santa hats.
Internally, this discourages the business from growing and limits their revenue. They feel deterred from going into new territory and often start to specialize in their respective country. Externally, this also hurts globalization and the sharing of ideas. The overwhelming majority of companies fall in this category, each with their own nuances and innovations, and the rest of us begin to lose out when we no longer have access to them.
With this said, Veem largely exists as a means of disrupting such an antiquated industry: it offers a clear solution to any business plagued by slow and expensive wiring. In turn, its overarching mission is to provide a more financially connected world. While they appear to have expressed an interest in expanding to large corporations and individuals, it is for these reasons that they direct their efforts towards the SMB range.
Field Study Questions
Finally, I’ve included some potential questions to ask the company on our trip (assuming that we go). These could be useful for anyone looking to learn even more about Veem:
- The multi-rail technology is one of your largest differentiators in this industry. Aside from the three that you currently use, though, are there any new or innovative rails for transferring money that you’re looking to incorporate?
- Last year, your company closed a $24 million Series B round from venture funding. How exactly have you used that funding since then, and how have your investors helped along the way?
- Veem used to be known as Align Commerce until it changed to the current name in March 2017. However, it sounds somewhat similar to Venmo and extremely similar to the software company Veeam. With that said, do you foresee another name change coming in the future?
- Gaining exposure and usage among businesses can be much harder than with individuals. Correspondingly, how do you market Veem and build momentum for yourself?
- As you continue to grow, do you see in-application advertising as another revenue stream for your company? If so, how do you plan to implement it?
I hope you’ve now gained a little more insight on this platform and the world of international exchanges. The future certainly looks bright for this young company, and who knows – maybe one day you’ll decide to “just Veem” your money too.
Thanks for reading!