PeerTransfer seeds cheaper wire transfer
Before the $1.1 million first round he announced yesterday from venture capital firms and angel investors, PeerTransfer Corp. founder Iker Marcaide had another source of startup financing: his college loans.
Marcaide came to the U.S. from Europe to attend MIT, but soon began to focus on a problem he thought he could solve: the exorbitant exchange rates he was paying to convert euros to dollars – three to six percent, plus a wire fee. PeerTransfer offers the same service, but charges one percent, and no wire fee.
“The issue with banks is they have this huge overhead,” Marcaide said. “You go to a bank and there are five guys there. Of course you need to pay their salary. Our case is a streamlined online bank.” In other words, it’s like an ING Direct for overseas money wires.
In July, 2009, Marcaide used some of his student loans to seed PeerTransfer. He hired one full-time employee, and a team of contractors to build the web-based service, which is now in private beta. Yesterday, Marcaide announced a $1.1 million round led by venture investors Spark Capital of Boston. Boston-area angel investors include John Landry (former Lotus Development CTO), Roy Rodenstein (Going Inc. co-founder), and Ken Morse (3Com co-founder). Project 11 Ventures, a new, Cambridge-based seed fund established by former Microsoft employees Reed Sturtevant and Katie Rae, also participated, as did Dave McClure, a West Coast angel investor.
It’s the second investment announced by Project 11, which participated in a $300,000 round for Cadio Inc. in September.
The round’s $1.1 million value was reported by the New York Times.
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