TransferWise hits $5bn valuation with $319m liquidity round
TransferWise, the cross-border money transfer service which recently announced its move into investing, has hit a $5 billion valuation.
“Nine years in, we’re saving our customers £1 billion in hidden fees every year,” says CEO
Existing stockholders and TransferWise employees have sold $319 million of their shares in the private company.
Liquidity round
The liquidity round was led by new investor D1 Capital Partners, and existing shareholder Lone Pine Capital. Shareholders Baillie Gifford, Fidelity Investments and LocalGlobe have all expanded their holdings in the company.
“We have been impressed by the extensibility of TransferWise’s platform, which now includes individuals, businesses and financial institutions among its customers,” says D1 Capital Partners’ Teddy Gleser.
TransferWise’s CEO and co-founder, Kristo Käärmann, says it is building something “even more rare” than a unicorn.
“Nine years in, we’re saving our customers £1 billion in hidden fees every year,” he adds. “That’s a start, but only a small dent in what banks collect.”
The start-up has funded itself exclusively through its customers for the last few years. This secondary round gives new investors an opportunity to step in, and rewards existing investors and employees holding shares.
Rapid growth
The fintech, which landed a $3.5 billion valuation last year, says it has seen a 43% uplift in its value since May 2019.
The profitable start-up, which claims eight million users, says it is not planning on raising any primary capital. It has raised $689 million to date. Investors include Merian Global Investors, Andreessen Horowitz, Richard Branson, and PayPal’s Max Levchin.
Moving beyond its cross-border payments offering, TransferWise now holds more than £2 billion in multicurrency current account deposits. It says it has issued more than one million debit cards since 2018.
Earlier this month, it also landed a licence from the Financial Conduct Authority (FCA) to offer retail investment services in the UK – marking its expansion into investment products.
Its business offering, which recently partnered with Xero and GoCardless, is adding 10,000 business customers each month, according to TransferWise.
Read next: TransferWise lands licence from FCA to offer investment products
it’s a great performance, and shows how poorly traditional banks serve the bottom end of the market.