Money Transfer Site Attracts Venture Capital

PeerTransfer, a Boston-based Web service that specializes in international money transfers and payments, said Thursday that it had secured its first round of venture funding, worth $1.1 million.

The funding round is being led by Spark Capital, an investment firm that has put money into Twitter and Tumblr. The round also includes a number of well-known angel investors including Dave McClure and John Landry.

PeerTransfer was born a few years ago at the Massachusetts Institute of Technology when Iker Marcaide, a student at the time, wanted to transfer money from a bank account in London to an account in Boston.

Mr. Marcaide said in a phone interview that he “incurred a number of high transfer fees and curious exchange rates as the money passed through different countries until it finally reached Boston.” He explained that peerTransfer finds the best route for the money and can “save customers money that is otherwise wasted on bank transfers.”

Alex Finkelstein, a general partner at Spark Capital, said in a phone interview that he sees a lot of investment potential in start-ups that challenge the banking industry.

“Banks can be incredibly inefficient and can cost customers inefficient expenses,” he said. “International transfers are a perfect example of these inefficiencies and we think peerTransfer has the potential to complete change the way customers send money overseas.”

Mr. Marcaide said he hoped to use the new funding to expand the company’s transfer locations beyond the 35 countries it works with today.

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