Right now, the money transfer industry is booming, thanks to the rapid globalisation. As more people travel and establish businesses across international borders, several money transfer startups have popped up globally to facilitate the easy movement of funds abroad.
In fact, numerous people prefer the money transfer platform due to various reasons including high-transfer speed, low cost, and other benefits. Truth be told, this payment model has the potential to change how people move money around for the better.
€4.2 billion valuation
Launched in 2011, Transferwise has made quite a name for themselves in the P2P money transfer platform.The UK fintech company aims to make international money transfers cheap, fair, and simple.
Recently, the company has announced secondary sales amounting to a total of $319 million (approx €271 million) at a valuation of $5 billion (approx €4.2 billion). This new valuation represents an increase of 43% since May 2019.
The round was led by existing investor Lone Pine Capital and new investor D1 Capital Partners. Also, the round allowed shareholders and employees to sell some of their holdings to other new and existing investors.
The employee share sales were settled using the TransferWise for business platform. The business product is one of the fastest-growing elements of the TransferWise portfolio and has recently launched partnerships with Xero and GoCardless.
Vulcan Capital also came on board as a new investor, along with existing investors including Baillie Gifford, Fidelity Investments, and LocalGlobe.
10,000 business customers each month
As per the company claims, it is adding 10,000 business customers each month. Around 10 banks across three continents, including neobanks Monzo, N26, bunq, and Aspire in Singapore, now offer TransferWise’s service to their customers through the TransferWise for Banks API.
In this regard, here’re the 5 things you need to know about the money transfer fintech unicorn.
#1 Both founders from Estonia
TransferWise was founded by a couple of Estonians – Kristo Kaarmann and Taavet Hinrikus, who worked in the UK. Taavet was the first employee at Skype and Kristo had a financial services background from Deloitte and PricewaterhouseCoopers.
Every month they moved their money the old way – which wasted their time and money. So they invented a workaround that became a billion-dollar business.
# 2 Had fair share of problems with international money transfers
Both Kristo Käärmann and Taavet Hinrikus have had their fair share of problems while transferring money. In this regard, Hinrikus said that he lost around 5% of cash whenever made an international transfer. On the other hand, Kristo Käärmann lost some percentage of the money during each transfer for his mortgage in Estonia.
#3 Cheaper than most competitors
TransferWise provides customers with a lower-cost alternative to traditional means of moving money internationally. Well, the London-based company works with an independent research company to run price-comparison research on a regular basis.
According to the research, TransferWise is on average
- 5x cheaper than leading French banks
- 5x cheaper than leading German banks.
- 13x cheaper than leading Spanish banks.
- 8x cheaper than leading UK banks.
- 5x cheaper than leading Swiss banks.
#4 No more bitcoins
At one point in time, TransferWise allowed the transfer of Bitcoins. But they’ve stopped later due to pressure from its banking providers since the digital currency created more complications due to its existence.
#5 Some numbers to crunch
Right now, TransferWise serves 8 million customers worldwide, processing £4 billion in cross-border payments alone every month. Furthermore, the payment platform saves its customers £1bn every year in bank fees. Almost 30% of its international transfers are instant (delivered in less than 20 seconds). At present, the company has 14 offices, with over 2,200 employees.
Main image credits: TransferWise