Introduction to India’s Remittance Market

India has consistently been one of the world’s top recipients of remittances for over a decade. According to data from the country’s central bank, inward remittances have significantly increased from $55.6 billion in 2010-11 to $118.7 billion in 2023-24. The bank forecasts that this figure will reach $160 billion by 2029.

Growing Demand for Digitalized Banking Experiences

This substantial growth in remittances indicates a rising demand for digitalized banking! experiences tailored to non-resident Indians (NRIs), encompassing a range of services from remittances to investments in various assets back home.

Aspora: Building a Verticalized Financial Experience

Aspora, formerly known as Vance, is currently developing a verticalized financial experience for the Indian diaspora, with a central focus on convenience. Although the company has plans to introduce a variety of financial products in the future, its primary focus at present is on remittances.

Challenges Faced by Non-Resident Indians

According to Garg, multiple financial products for non-resident Indians exist, but they are not aware of them due to the lack of a digital journey. NRIs often use the same banking apps as residents, making it more challenging for them to discover products specifically designed for their needs.

Aspora’s Growth and Funding

In the last year, Aspora has experienced significant growth, increasing the volume of remittances by 6x, from $400 million to $2 billion in yearly volume processed. This growth has attracted considerable investor interest. The company raised $35 million in Series A funding in December, led by Sequoia with participation from Greylock, Y Combinator, Hummingbird Ventures, and Global Founders Capital, valuing the company at $150 million. Following this, the company tripled its transaction volume in four months, prompting investors to provide additional funding.

Series B Funding

Aspora has announced that it has raised $50 million in Series B funding, co-led by Sequoia and Greylock, with contributions from Hummingbird, Quantum Light Ventures, and Y Combinator. This round values the company at $500 million, bringing the total funding raised to over $93 million.

Expansion and Services

After initially offering remittance services for NRIs in the U.K. in 2023, Aspora has expanded its presence to other markets, including Europe and the United Arab Emirates. The company charges a flat fee for money transfers and offers competitive rates. Additionally, it now allows customers to invest in mutual funds in India. Aspora markets its exchange rates as the "Google rate," which is often searched by customers for currency conversion rates, although these rates may not reflect live rates.

Future Plans

The company is set to launch in the U.S., one of the largest remittance corridors to India, next month, and plans to expand to Canada, Singapore, and Australia by the fourth quarter of this year. Garg, who grew up in the UAE, stated that remittances are just the beginning, and the company aims to develop more financial tools for NRIs.

Building Financial Solutions

Aspora intends to use remittances as a starting point to build all the financial solutions the diaspora needs, including banking, investing, insurance, lending in the home country, and products that help them care for their parents. A significant portion of the money NRIs send home is for wealth creation rather than family sustenance, with 80% of Aspora’s users sending money to their own accounts back home.

Upcoming Products

In the coming months, the company plans to launch several products to offer more services. This month, it will introduce a bill payment platform for services like rent and utilities. Next month, it will launch fixed deposit accounts for non-resident Indians, allowing them to park money in foreign currency. By the end of the year, it plans to launch a full-stack banking account for NRIs, which typically takes days to open. These accounts can help the diaspora maintain their tax status in India, a process often hindered by cumbersome procedures.

Supporting NRIs’ Parents

Apart from banking services, Aspora aims to launch a product that helps NRIs care for their parents back home by offering regular medical checkups, emergency care coverage, and concierge services for other assistance.

Competition

Aspora faces competition from global players like Remittly and Wise, as well as India-based rivals such as Abound, which was spun off from Times Internet.

Investor Confidence

Sequoia’s Luciana Lixandru is confident that Aspora’s execution speed and verticalized solution will give it an edge in the market. She emphasized the importance of speed of execution and deliberate corridor-by-corridor expansion in financial services, indicating a promising future for Aspora.