The London headquartered money transfer service, TransferWise today announced secondary funding of $292 million (€261 million), confirming its status as one of the world’s fastest growing, profitable technology companies. With this investors are now valuing the company at $3.5 billion (approx. €3.13 million). To date, the company has raised $689 million (approx. €617 million) in primary and secondary funding.
The round was led by growth capital investors Lead Edge Capital, Lone Pine Capital and Vitruvian Partners. Existing investors Andreessen Horowitz and Baillie Gifford expanded their holdings in TransferWise. Investment was also provided from funds managed by BlackRock.
TransferWise always offers customers the real exchange rate, and has campaigned since its inception to end the traditional practice of hiding fees in a rate mark-up. In 2018, the EU voted to mandate the TransferWise model, outlawing exchange rate mark-ups on international payments through its Cross-Border Payments Regulations.
Australia is considering similar regulatory measures, commissioning an inquiry into the issue by the Australian Competition and Consumer Commission. This was prompted by high levels of consumer complaints about the way banks mark-up foreign currency transactions today.
Transferwise: Interesting facts
- The company now serves 5 million customers worldwide, processing £4bn every month.
- Further, TransferWise saves its customers £1bn every year in bank fees.
- Also, almost 20% of its international transfers are instant (delivered in less than 20 seconds).
- It handles 1,600 currency routes, 49 currencies.
- Over 1,600 people in the team across twelve global offices – will hire 750 more people in the next 12 months.
- Audited financials for fiscal year ending March 2018 revealed 77% revenue growth to £117 million and a net profit of £6.2m after tax.
One more fact: Now in 170+ countries
TransferWise has expanded significantly beyond saving international bank fees for consumers, now serving small business owners, large corporates and banks themselves. Its borderless account is now available in 170+ countries, with an accompanying debit card launched in Europe in 2018 and set to expand into the US and APAC this year. TransferWise plans to make 750 new hires across its global offices in the next 12 months.
France’s second largest bank, BPCE, as well as neobanks Monzo and bunq, signed up to offer TransferWise’s service to their 15 million customers through its API in 2018.
Nimay Mehta, General Partner, Lead Edge Capital said: “The world is moving towards a more transparent way of doing business and we want to be part of that. International money transfers represent a multi-trillion dollar market, until now dominated by banks keeping prices artificially high and transfer times slow. TransferWise has changed all that. For the first time people can send money all over the world at the real exchange rate for a transparent fee, and it’s no wonder five million customers have come onboard so far. The opportunity for TransferWise is set to grow exponentially now that regulators from Europe to Australia are making transparency the status quo. ”
Kristo Käärmann, CEO and co-founder, TransferWise said: “TransferWise is experiencing phenomenal growth and this investment is testament to that. We don’t need to raise funds to continue on this trajectory, but we’re humbled by the persistent level of interest in joining our mission. The round provides a way for these investors to buy in, alongside rewarding some of the earliest contributors who’ve been with us since the beginning.
“Eight years in, this is still early morning for TransferWise. Our north star is the money we save people every year through our low cost, transparent model. Today that is £1 billion annually, but there are hundreds of billions to go. Seeing the EU legislate against sneaky exchange rate mark-ups has been a momentous step in the right direction. Investors believe our model, now legally mandated, is best for the customer and the future of the industry. We’re working to see this law replicated across the globe in the next phase of our journey.”
Co-founded by Taavet Hinrikus and Kristo Käärmann, TransferWise was launched in 2011. As per the company press release, over five million people use TransferWise, which processes over £4bn in payments every month, saving customers over £1bn a year.
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