The round, which involved the boutique venture capital firm QED Investors, is the company’s third since 2010. It takes the total funding raised to $15 million.
“Now we want to expand the initial schools we have in markets like Australia, Canada and the UK”
Iker Marcaide, PeerTransfer’s founder, told The PIE News the round would help the company expand.
“Our partner institutions cater to around 40% of all the enrolled international students in the USA. Now we want to expand the initial schools we have in markets like Australia, Canada and the UK and take them to the same level.”
In total PeerTransfer is used by 350 schools worldwide with 335 based in the USA. Marcaide, a Spanish national, started the firm after taking an MBA at the Massachusetts Institute of Technology, where he was shocked by the cost of wiring fee payments from abroad. Schools were also bogged down by the convoluted process of receiving payments through the global banking system.
The firm works by “sharing savings” with students who use its services. This means schools don’t pay to use the service, students still get a discount and PeerTransfer takes a margin. “So in effect nobody pays,” said Marcaide.
Most of its focus has so far been on the US’s biggest student markets – China, Korea and India. While this won’t change anytime soon, the firm claims to be adding around 20 new schools per month. It also says that between 2011 and 2012 the number of payments it handled increased tenfold.
Estimating that around $50million in payments is sent globally each year, Marcaide believes demand will grow
“The company has demonstrated impressive results during the last two and a half years,” said Nigel Morris, Managing Partner at QED Investors. “We are confident that peerTransfer is well positioned to lead the international payments space for education and beyond.”
Although still in its infant stages, the international education payment space has grown quickly in the last few years, with other big players emerging such as Western Union Business Solutions and Unipay. Estimating that around $50million in payments is sent globally each year ($20m into the US alone), Marcaide believes demand will only grow.