Toronto-based fintech Koho has reached a significant milestone, crossing the 2 million user mark while simultaneously launching a major new feature: international money transfers to over 190 countries. This expansion represents a strategic shift for the neobank as it diversifies beyond its core banking services into the competitive remittance market.
Breaking Down Barriers in Money Transfers
The new international transfer service promises to address common pain points in the remittance industry. Koho claims to offer better-than-average exchange rates by using live rates for every transfer, combined with transparent pricing and no hidden fees. According to VP of Growth and Data Ziv Deutsch, the company negotiated "preferred" pricing to deliver the best rates on the market for transfers to key destinations including the European Union, India, Mexico, Pakistan, the Philippines, and the United States.
"Our focus is very much on being as helpful as possible to our users and not on what a traditional bank may offer," Deutsch explained, emphasizing that the feature wasn't developed to compete directly with existing providers, but rather to create "more transparency and equity in the pricing."
Taking on Established Players
The remittance market has traditionally been dominated by conventional banks and money wiring companies like Western Union, though digital disruptors like Remitly and Wise have gained ground with similar promises of fee transparency and competitive rates. Koho's entry into this space reflects the broader trend of fintech companies expanding their service offerings to become more comprehensive financial platforms.
A Growing Financial Ecosystem
Since its founding in Vancouver in 2014 and subsequent move to Toronto in 2017, Koho has steadily expanded its services. The company now offers a prepaid Mastercard, lines of credit, credit history building for renters, tenant insurance, and even an eSIM product for international travelers. The international transfers feature is part of a broader roadmap that includes upcoming cheque deposits and a buy-now, pay-later service.
This expansion has been fueled by significant funding rounds, including a $210 million raise in 2022, an $86 million Series D extension in late 2023, and a $190 million round in 2024 to support bank licensing efforts.
The Path Forward
While Koho operates without a traditional banking license, its growth to 2 million users demonstrates the appetite for alternative financial services among Canadians. The company's approach of adding features based on user needs rather than simply copying competitors suggests a customer-centric strategy that could help it maintain its growth trajectory.
As the fintech landscape continues to evolve, Koho's expansion into international money transfers positions it as a more complete financial service provider, potentially capturing a larger share of its users' financial lives while challenging traditional banks' dominance in the remittance space.