Xoom files for USD50m IPO

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Plans for an initial public offering

Online cash-transfer company Xoom Corp. has disclosed plans for an initial public offering worth as much as USD50m Friday.

San Francisco-based Xoom operates an online, international money-transfer business. Customers can send funds to other customers in 30 countries. The company generates revenues from transaction fees.

The company’s typical customers are people who moved to the U.S. and are looking to send cash to family and friends at home. Since 2004, the market for so-called remittances has grown at a 12% annual rate, to USD513bn in 2011, according to the World Bank. That figure is expected to grow at a 7% annual rate, to USD685bn, by 2015.

Xoom lists Western Union Company and MoneyGram Payment Systems as their primary competitors. The company’s revenue grew 68% in the first nine months of 2012, to USD57.8m. It hasn’t reported a profit in any full year, and booked a net loss of USD4.3m in the nine months ended in September, as marketing and customer-service costs widened.

The company said in the filing that it plans to list on the Nasdaq Stock Market under the ticker XOOM, without stating how many shares it plans to sell. Barclays and Needham & Co. will serve as Xoom’s lead underwriters.

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