Today Miami-based BlueKite announced that it has raised $1.5 million in seed funding from investment fund PeopleFund and several other investors including the company’s founders. The company was founded in 2011 to provide cross-border bill payment services, and is playing in a similar space as other startups like TransferWise that are helping people with cross-border payment solutions.
Right now the platform focuses primarily on cross-border bill payment, helping people who have emigrated from countries in Central and Latin America pay their electricity, gas, water, internet, cable, and mobile phone bills. Co-founder Bobby Aitkenhead said this new round of funding will help with further development, with additional country launches expected within the next six months in areas including South America, Africa, and Southeast Asia. Right now the company supports bill payment in Mexico, Guatemala, Honduras and El Salvador.
Aitkenhead is originally from Guatemala and has a finance background, and he decided to start BlueKite with his two co-founders to focus on financial products for emerging markets. They originally looked at helping “unbanked” populations (those who don’t have bank accounts) pay their bills easily, but decided to focus on those who are looking to send money back home, often money that gets used to pay bills. ”We found that a lot of these unbanked populations, especially in Central America and Mexico, have family members in the U.S. or other developed nations and commonly receive remittances on a monthly basis,” he said, adding that they want to save people from having to send money home for bills, instead giving them a way to pay bills directly.
BlueKite doesn’t provide a direct-to-consumer platform yet, rather it provides an API that hooks directly into utility companies’ accounting systems. They then partner with distributors like cash advance stores, letting people pay their bills by listing their account number and paying in-store, and taking a flat fee per transaction. They are currently in 40 stores in Florida, with plans to be in 400 by the end of the quarter. Since they deal with regulatory and licensing hurdles, Aitkenhead said the funding will also be used for acquiring licenses in different states and complying with regulations in new countries.
The company isn’t planning to get into cash remittances, letting family members send cash to family members at home, but sees potential partnerships with companies that provide complementary services. ”We wanted to bring a complement to that service, so instead of just being able to send cash they could actually…just pay a family member’s bills,” he said.
According to the company’s research and World Bank statistics, more than $60 billion is remitted annually from the U.S., and these money transfers are growing at an eight percent annual rate. With a market that big, BlueKite should be able to make a dent if they can continue to partner with the billing companies and distributors, while also launching in new markets. Their biggest hurdle will be changing people’s existing behaviors, namely sending money home to relatives who then pay the bills themselves. Partnering with remittance services will likely give them exposure to their target market, but whether remittance companies will want to give consumers a workaround to their product is another question altogether.