TransferWise bags $5bn valuation on the back of $319m secondary share sale

New details have emerged about TransferWise’s latest deal that saw the UK FinTech unicorn’s valuation rise past the $5bn mark.

Some reports already circulated earlier in July that D1 Capital Partners had bought a 4% cut of TransferWise, paying $200m for the privilege. Now it has been revealed that the global investment firm, which also owns shares of Netflix, Facebook, Google, Disney and Microsoft, was not the only investor leading the TransferWise’s round.

The other co-lead investor in the round was Lone Pine Capital, which also supported TransferWise’s secondary share offering in May 2019.

The new round also saw Vulcan Capital inject fresh funding into TransferWise. Baillie Gifford, Fidelity Investments and LocalGlobe expanded their existing holdings.

The new $5bn valuation represents a 43% increase since May 2019. The round allowed shareholders and employees to sell some of their holdings to other new and existing investors.

“TransferWise has built an exceptional platform within the cross-border payments ecosystem by maintaining an unwavering focus on its customers and constantly innovating,” said Teddy Gleser, partner at D1 Capital Partners. “We have been impressed by the extensibility of TransferWise’s platform, which now includes individuals, businesses and financial institutions among its customers.”

CEO Kristo Käärmann and Skype veteran Taavet Hinrikus co-founded TransferWise in 2010 after both of them had grown frustrated with the fees involved with cross-border transfers.

But while TransferWise began as a reasonably straightforward money transfer product, it has expanded its offering to include a borderless account. The TransferWise borderless account holds over £2 billion in current deposits. One million debit cards have been issued by the firm since 2018.

TransferWise is also enjoying growth with its business platform, which was recently bolstered through partnerships with Xero and GoCardless. The company is adding 10,000 business customers each month. Moreover, ten banks across three continents, including neobanks Monzo, N26, bunq and, as of today, Aspire in Singapore, now offer TransferWise’s service to their millions of customers through the TransferWise for Banks API.

Today, the venture serves eight million customers worldwide, processing £4bn in cross-border payments alone every month.

“There’s lots of talk about unicorns, but in reality we’re building something even more rare,” said Käärmann. “TransferWise is a fast growing, profitable business, guided by a mission to build the best way to move money in the world – instant, convenient, transparent and eventually free.

“Nine years in, we’re saving our customers £1bn in hidden fees every year. That’s a start, but only a small dent in what banks collect. We’re still at the beginning of a long journey, and we’ve built a financially sustainable company to get there.

“We’ve been funded exclusively by our customers for the last few years and we didn’t need to raise external funding for the company. This secondary round provides an opportunity for new investors to come in, alongside rewarding the investors and employees who’ve helped us succeed so far.”

And the company is not looking to stop growing anytime soon, with TransferWise having bagged a license from the Financial Conduct Authority earlier this summer to to offer savings and investments options in the UK.

TransferWise plans to leverage the thumbs up from the regulator to launch a new product set to launch in the next 12 months.

Copyright © 2020 FinTech Global

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