There is nothing more annoying than having a stash of gift cards and vouchers that you cannot convert into useable money. This is where a company like AirTM comes in as their dollar-based e-wallet allows you to do just that. AirTM made financial news in 2018 when they managed to raise $7 million to fight hyperinflation. Despite being a hot topic of conversation in financial circles, there are many people who do not even know that this company exists. So, what is known about this company and what have they done since raising this money?
According to CrunchBase, this banking and transaction processing company was founded in June 2015 by Antonio Garcia, Ruben Galindo, Joshua Kilot, Tim Parsa, and Jorge Ruiz. The Mexico City-based company is described as an e-wallet business that is connected to more than 300 bank and e-money systems. These connections are made through both direct bank connections and peer-to-peer networks. The e-wallet allows users to hold their money as either cryptocurrency or dollars. Users can send money or receive money both domestically and internationally.
The company, which now has headquarters in both Mexico City and San Francisco, was originally founded with the aim of leveraging digital money. The goal was to help those living in developing countries to avoid currency devaluation, thus allowing them to preserve their wealth and to free-up their money from any disconnected money networks they use. This money service business is now US-registered.
On their website, Ruben Galindo, AirTM’s CEO, describes how the company is committed to bringing quality financial services to developing countries. The website also outlines its aims, which include striving to become an efficient and reliable service, and to use technology to promote economic empowerment. So, how does this company make money? The simple answer to this is that they charge fees for converting money. However, the fees are rather complex and depend on your payment method. Medium explains AirTM’s pricing strategy further.
They describe how AirTM has a lightly managed model, which is a model that was popularized by Uber. This means that there are protection guarantees for both buyers and sellers there are tools to enhance the efficiency of the marketplace, and there are human intermediaries. The company makes daily calculations to make sure that people are getting a fair exchange rate and they charge fees according to the supply of money form a source. For example, you would pay more to deposit money via PayPal because there is a huge supply of money from them.
You may wonder who would use such a service and it may seem like it is the ideal platform for money-laundering. However, this is not the case as there are anti-money laundering measures in place and the service has actually become extremely popular with specific groups of people. According to Tech Crunch, this service is particularly popular in Venezuelan users, as well as users from many other countries with volatile currencies. It is people from these countries who have seen their savings turn into little more than a pile of worthless bills. Tech Crunch goes on to explain that AirTM is not a bank account, but it potentially a good alternative to traditional banking for those who live in countries with a volatile currency. To achieve this, AirTM started a series A round of funding in 2018 to raise $7 million to expand their company. So, what has happened since they raised this vital funding?
A quick glance at their website, it is clear just how far the company has come since raising the money. Now that the company is about to enter its fourth year in business, there is a clear management structure and additional staffing has been put in place. The founders all have clearly defined roles, with Galindo as chief executive officer, Garcia as president, Parsa as chief channel officer, Ruiz as chief technology officer, Sanchez as chief financial officer, Valencia as chief operations officer, and Kilot responsible for the company's product. The roles of the 16 additional staff are just as clearly defined, with each responsible for a different aspect of the company’s operations.
It is not just the number of staff that has increased, as the number of people using the site has also increased significantly. Prior to receiving the funding, there were approximately 400,000 users of the sites. Since receiving the funding, there are now more than 510,000 users of AirTM. Although the company began in Mexico and expanded to the United States, the users are now from 163 countries across the globe and the company has completed almost 2.7 million transactions. The company now offers over 200 ways to send or receive money.
A further way that AIrTM has developed their company is to improve the user experience. They are aiming to make using the service as simple as possible for users while offering them fair rates and a variety of payment options. The company has been able to expand to this level because of the funding they have received so far. Their three biggest investors, that all contributed significant sums of money during the series A funding round, are Blue Yard Capital, Ignia, and BanktotheFuture. Blue Yard Capital is an investment company that specializes in investing in companies that have ideas that will transform and decentralize markets, liberate data, and empower users. Blue Yard Capital has described AirTM as a company that empowers people by helping them to regain financial liberty by exchanging financial assets without the need for a bank account.
In an article posted on Medium, Blue Yard describes the three main ways that AirTM helps its customers following their investment. First, they say it allows users to quickly convert local money to either USD or cryptocurrency. Second, it is a way for them to send and receive USD payments. Third, it frees up any money that the user has trapped in local e-wallets that do not have connections to the free market.
The article goes on to say that there are now thousands of monthly users who are predominantly from Venezuela and other Latin American markets. Blue Yard Capital also describes AirTM’s plans for expansion now that they have funding. This includes providing more services, such as offering payments API, expanded crypto access, and debit cards. Ignia is another investment company. They specifically invest in Mexican companies that are reinventing the way to do business. They will invest in companies in media and entertainment, education, health, retail, marketplaces, and financial services. As AirTM is a business that falls into both marketplace and financial service sectors, it was an ideal investment option for Ignia.
BanktotheFuture is an online investment platform that provided a way for AirTM to gain more funding On the BanktotheFuture website, the disclosed funding is listed as $1.4 billion. This funding was received from a variety of sources using the platform as the middle-man. Expansion further detailed how AirTM is using the money raised from investors. Galindo told them how they are planning to expand on some of the services they are already offering. For example, they intend to offer a saving account in dollars that comes with a credit card. They also want to improve the platform for buying and selling cryptocurrencies.
In this sense, what AirTm aims to offer is a bitcoin account. Galindo says that they are trying to simplify and unify what they are offering and providing users of their services with clear benefits. Galindo said that they intend to expand the availability of these services beyond Venezuela to countries including Argentina, Colombia, Brazil, Chile, Mexico, and Peru. To enable them to do this, the company is expanding to a team of 80 people who will serve customers making transactions that are estimated at $10 million each month. In the telephone interview, Galindo explained that they had connected with the United States payment systems to enable them to offer these services and that they intend to do the same in the European Union in the future.
Galindo also spoke about how they had raised the money from Blue Yard and other investors. They put together an investment plan and invited potential investors to meet with them for a presentation. This led to the company receiving investment offers and allowed them to move their investment plan forward. It took them just two months to raise the money they needed. In turn, this has allowed them to take steps towards expanding into other countries and to generate more value form their products and services. Although AirTM is a private business trying to make a profit and raise funding, they genuinely want to help the people of Venezuela. In 2018, Bitcoin Magazine reported that AirTM were trying to raise $1 million in cryptocurrency donations for an airdrop in Venezuela to help the Venezuelan people. To raise this money, AirTM collaborated with Zcash Company and Venezuelan educators and journalists.
Ruben Galindo, the CEO of AirTM, told the magazine that Venezuela is often used as a prime example of a company that desperately needs cryptocurrency. However, very little effort has been put into bringing cryptocurrencies to the people of Venezuela. The crypto porrect was called Airdrop Venezuela, and it was intended as the first step in bringing the benefits of crypto technology to the people who need it the most. Another report, published in Forbes, also praised AirTM’s efforts to bring cryptocurrency to the people of Venezuela and other Latin American countries. The article explains how AirTM has teamed up with Steve Hanke, a professor of applied economics at John Hopkins University and an expert in hyperinflation. This is just one of the many collaborations that have stepped in to help the inflation-ravaged country where the Venezuelan government has failed.
Hanke told Forbes that he had collaborated with AirTM to provide the people of Venezuela a simple way to exchange their bolivars for dollars. The hyperinflation expert also explained that offering cryptocurrency is a better and safer option than delivering cash to the Venezuelans. Encouraging Venezuelans to become dollarized by using cryptocurrency is not just a purely selfless act on the part of AirTM. Although it will have a positive impact on the economy of Venezuela, it will also benefit their company. If the Venezuelans start using dollars and cryptocurrency, they will need to use a service such as that offered by AIrTM. Currently, AirTM has very little competition in terms of finance companies offering such services. Therefore, they can grow their user numbers and this, in turn, will also increase their profits.
Although AirTM has come a long way since it was founded in 2015 and has expanded greatly since its series A round of funding, it still has a long way to go to achieve all its goals. As the founders have achieved each of their goals, they set even more ambitious goals to aim for in the future. For them to achieve everything they are striving towards right now, it is possible that they may need further investment in the future. However, as the founders have such innovative ideas that will help so many people around the world, it is an exciting investment opportunity for any potential investors out there. It is likely that it will take them some time to expand into the European market, which is one of their goals, although there is no reason why this is something they cannot achieve. Overall, receiving funding has allowed AirTM to make significant waves in the fintech industry. The signs so far are that this company has every chance of success.
Written by Liz Flynn
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