Online international money transfer service Xoom boosted already positive first quarter earnings with the acquisition of BlueKite, a startup focused on improving mobile payment options in underbanked portions of Latin America. This comes on the heels of a strong 2013 for Xoom which included a partnership with Red Pocket, allowing customers to do international money transfers securely over mobile devices.
BlueKite’s founders are a trio of serial entrepreneurs with success launching and then selling other web-based operations. Another of their startups, PeopleFund, put up seed money in 2013 for BlueKite and remaining startup funds were completed by personal investments from the startup team. Founder Jose Vargas commented that BlueKite has been a long time in the planning stages with commitment from the three partners even before PeopleFund took off on its own.
For Xoom the acquisition means expanding options for customers in several of the thirty-one countries it currently serves. BlueKite was launched in hundreds of stores throughout Florida to help family members in developing nations by directly paying bills, including utilities, water, Internet, cable, phone and financial payments. For some families it is emotionally easier to accept payment of a bill from a loved one abroad than to accept cash, and for the remitter it’s easy to know exactly where the money sent is going.
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In working with underserved families BlueKite determined that cash store operators were the best way to inexpensively market their service and moved slowly toward growth by handpicking facilities to work with. They soon added the ability to send prepaid airtime minutes to over seventy countries through a partnership with TransferTo. Xoom customers can now take advantage of standard money exchange in South America, much of Europe, Australia, India and part of Africa, plus BlueKite’s additional services offered throughout Latin America.
BlueKite co-founder Bobby Aitkenhead will head up Xoom’s Bill Pay and Top Up services as vice-president.
After announcing the addition of BlueKite services in early February Xoom has been outperforming market estimates, reporting seven cents higher per share earnings than expected. Year-to-year income is up 44 percent over the same period last year, which has prompted analysts at Raymond James to upgrade Xoom from a “market perform” status to “strong-buy.”
Edited by Alisen Downey
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