Last week, Equistone, a European private equity firm, announced it is acquiring Small World Financial for an undisclosed amount. With revenues over £110m, Equistone has bought themselves a strong platform on which to build a significant remittance player.
With so many investors focusing on the digital and mobile transformations of the sector, this transaction is interesting as it is not a digital play. What we have seen over the last five years is a steady stream of private equity players buy into the space with one of two strategies – organic or build and buy.

Most firms are following the traditional build and buy model – Moneycorp, Currencies Direct and Global Reach are each anchoring this strategy. Less common is the organic push seen by World First and FTV.
As the cross-border segment is so fragmented, companies of a meaningful size that are also available to purchase are not easy to come by. With typical 5-7 year investment horizons, it is clear some investor groups are much further along than others. We would expect to see a number of exits over the next few years, especially if valuations remain strong (e.g. Cambridge/Fleetcor or the recent Transferwise and Remitly raises).
What Path will Small World Financial take?
Small World had several attractive features for a private equity buyer. First, the company whilst small compared to Western Union and MoneyGram is big enough to provide a base from which to build. Second, it has a strong enough base in the often forgotten or dismissed offline cash world which still accounts for a significant part of the global remittance market.

Whereas Western Union and MoneyGram have capped out in many markets globally, if Small World takes just 2% share from these two giants, it will double in size. That should underpin its investor’s return nicely.
Valentina Vitali
Valentina is a Research Analyst at FXC Intelligence, with a passion for the payments and fintech world. Being curious by nature, Valentina enjoys getting to the bottom of things and understand the true drivers of companies and the market. In her work at FXC Intelligence, Valentina does this every day through the analysis of data and by creating stories around it.
Before joining FXC Intelligence, Valentina completed a MSc in International Management at the University of Trento and worked in market research, focusing on payments.