As a mentor at TechStars, Josh Hug got an inside peek at some of the cool technologies emerging inside the Seattle tech incubator. But one in particular grabbed his attention: Beamit. And now the 33-year-old former CEO at Shelfari is joining that young upstart in order to help transform the way people transfer money to those in developing countries.
In addition to the hiring of Hug as chief product officer, Beamit has lined up an impressive $750,000 in angel financing. The cash infusion will be used to launch the service — which enables immigrants to instantaneously transfer money to mobile phones in developing countries – early next year. The first target market for Beamit is the Philippines.
Hug, who sold Shelfari to Amazon.com in 2008, said he loved working at the online retailer. But, sometimes, the gravitational pull of startups can just be too great.
“For me, the opportunity was just too big not to go and try to tackle it,” Hug said of his new gig at Beamit. “I wanted to go and do something entrepreneurial again and … I was leaning to taking a swing at something big.”
“It is a really exciting opportunity to change the world,” Hug tells GeekWire. “If I look at the vision of our company — the vision is to make it more cost-effective for first-generation immigrants to transfer funds overseas.”
Oppenheimer started Beamit in Boise, Idaho, but relocated the company to Seattle after getting accepted into TechStars three months ago. The 29-year-old came up with the idea while overseeing mobile and Internet banking for Barclays Bank Kenya, helping them implement a new mobile banking strategy.
During his time in Kenya, Oppenheimer said he discovered just how challenging it was to receive money transfers.
“I got to know a family that lived in one of the slums in Nairobi and if there was an easy way to transfer money back to that family to put that kid through school, I’d do it,” said Oppenheimer. “But the problem is that the recipient doesn’t have a bank account, and they don’t need that much money, so the fees make it cost prohibitive.”
New mobile wallet technologies in the developing world, however, are creating new opportunities to send money overseas, he said. In Kenya, he said that the technology is known as M-Pesa, and it essentially works as a stored money account on your phone.
Kenya is a relatively small market, and that’s one of the reasons why Beamit has decided to start in the Philippines. Oppenheimer said that roughly $7 billion is transferred annually from the U.S. to the Philippines.
The company faces competition from banks and other money transfer firms, but Oppenheimer said they are going to undercut the competition on price and act in a transparent manner so users are not surprised by hidden fees. They expect the average money transfer to the Philippines to be about $300.
Oppenheimer said they plan to take a cut of each transaction. And while he declined to go into specifics, the entrepreneur said that it will be less than half the price of Western Union. For the Phillipines, Western Union charges about $15 on a $200 money transfer.
Hug said he’s excited about the technical challenges in front of the company, which was co-founded by Shivaas Gulati.
“This is a big opportunity, but it also takes a lot of capital and takes a large team. It is not an easy launch,” said Hug. “You have to have a transactional platform that’s going to be rock solid.”
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