Within the record year of venture investments in the fintech sector in 2015, currency exchange payment transfer firms made up a large part of the deals that were closed. Leading the way were investments in TransferWise, CurrencyCloud, and Kantox. Continuing that momentum is news that Israeli currency exchange startup, Covercy, has closed a $1.5 million funding round in a deal led by SGVC.
The investment by SGVC is part of a new $50 million fund launched this year by the venture firm to target US and Israeli firms. For SGVC, the firm has previous exposure in the fintech sector having participated in SoFi’s Series C round in 2014.
Similar to other payment transfer providers, Covercy has created a digital system for processing transfers that they believe provides more efficient pricing than banks. In order to decrease fees, Covercy operates bank accounts in countries that they support to receive and send payments. By utilizing local accounts for handling the ‘last mile’ transfer of the exchange to and from customers, they are able to reduce a portion of the costs involved with traditional cross-border transfers.
Created in 2014, Covercy has since been granted licenses by the UK’s FCA as an Authorized Payment Institution and a Currency Services Provider through Israel’s Ministry of Finance. Among the firm’s founders and operating as the company’s CEO is Doron Cohen. Prior to Covercy, Cohen was a founder of forex and binary options technology provider, Leverate, where he held the position of co-CEO before stepping down to become chairman of the board in 2014.