TransferWise, the international money transfer company and one of the best known unicorns in Europe, today announced a new investment of $ 280 million .
The E Series is led by Old Mutual Global Investors Asset Management and Silicon Valley Venture Capital Venture Company, and I also understand secondary transactions, which means that all of the money will not be recorded on its balance sheet.
A source close to TransferWise, which has been profitable since early 2017, tells me that the new financing values the seven-year-old company at $ 1.6 billion.
Sapphire Ventures of Silicon Valley, the Japanese company Mitsui & Co, Ltd. and the US venture capital firm World Innovation Lab also join the round as new investors. Existing funders Richard Branson, Andreessen Horowitz and Baillie Gifford also participated, bringing the total funds raised by the company to $ 397 million.
With regard to the share of the new investment in the newly invested capital and the secondary investment, TransferWise, which claims its transparent fees to the customers, refused to divide the exact distribution.
A much earlier report from Sky News says the tour also sees early company employees licensed to sell part of their stake in TransferWise, including founders Taavet Hinrikus and Kristo Kaarmann. In addition, Seedcamp recently cashed the rest of its stake in TransferWise as part of the sale of its first two funds to London VC Draper Esprit. The pre-seed and seed investor had already sold part of its stake in January.
All this suggests that a potential public offering of TransferWise is still a long way off.
In a call with Hinrikus, who was speaking at TechCrunch of Peru where he is taking a rare vacation, he confirmed that the new investment includes some employees partly banking but said that the main purpose of what is without no doubt a very great trick is to provide TransferWise with a healthier balance sheet while pursuing existing and new opportunities.
This includes continued global expansion, with a particular focus on the APAC region, where the company now has a dedicated hub, and the development of its Borderless account.
The latter was launched in May and is aimed at businesses, independent traders and freelancers who have to do cross-border business and in multiple currencies, and who want to take advantage of TransferWise's low exchange rate when they do not pay. ;they're doing it.
A consumer version, including a TransferWise debit card, is expected to be launched in the UK and Europe in early 2018. This will no doubt allow TransferWise to get closer to new FinTechs, such as Revolut or a plethora Fide challenger banks.
However, as I have already noted, it is almost certainly excited, even though there is definitely a creeping amount of parity with other fintech startups that offer bank accounts coupled with low exchange rates. "Concentration is the key," says Hinrikus, when I compare Revolut mischievously, before stressing that TransferWise's core business is transferring money around the world, that is, international money transfer.
In fact, the company is totally independent of how it goes: the more money is flowing through its infrastructure, the better it is. This can be done directly via the TransferWise application and service for consumers and SMEs, via third-party integrations or via the company's Borderless account. In all three cases, Hinrikus says that the business generates revenue, whatever that may be.
In the context of comparing challenger banks, I think one way of thinking about TransferWise's Borderless Account is that a multi-currency account is a feature of its international money transfer business. , while for the challenger banks, the money transfer exchange is a feature of its bank accounts. Hinrikus does not disagree, noting that TransferWise is already partnering with banks, including the N26 challenger and soon Starling.
He also pointed out that the international direct money transfer offer to individuals and businesses of TransferWise still has a long way to go. He is particularly excited about the company's plans for India, while I understand that he recently visited Brazil on TransferWise activities.
Meanwhile, the most recent figures on the UK's market share are at 10 percent and Hinrikus says that other geographies follow a similar trajectory. The company now serves more than two million customers and offers 750 foreign exchange routes, with customers transferring more than 1 billion pounds each month.