Wise (company)

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Wise
New Wise (formerly TransferWise) logo.svg
Type of site
Public company
Traded asLSEWISE
FoundedJanuary 2011; 10 years ago (2011-01)
HeadquartersShoreditch, England
Founder(s)Taavet Hinrikus
Kristo Käärmann
ChairmanTaavet Hinrikus
CEOKristo Käärmann
ServicesFinancial services, remittance
Revenue£302.6 million (March 2020)
Profit£21.3 million (March 2020)
URLwise.com

Wise (formerly TransferWise) is a London-based financial technology company founded by Estonian businessmen Kristo Käärmann and Taavet Hinrikus in January 2011.[1][2][3]

History[edit]

Regular money transfer versus peer-to-peer money transfer (used by Wise)

Wise was founded by Taavet Hinrikus, Skype's first employee,[4] and financial consultant Kristo Käärmann. Its system has been compared to the hawala money transfer system.[5][6][7][8]

In its first year of operation, transactions through Wise amounted to €10 million.[9] In 2012, Wise was named as one of "East London's 20 hottest tech startups" by The Guardian, Start Up of the Week by Wired UK, one of five "start-ups to watch" at Seedcamp's 2012 US Demo Day by TechCrunch, and made it to Startups.co.uk's list of the top 100 UK start-ups of 2012.[10] [11][12][13]

In April 2013, Wise stopped letting users purchase Bitcoin, citing pressure from banking providers.[14] Independent comparison site Monito revealed that Wise was on average 83% cheaper than the big four UK banks on major currency "routes", but could be up to 90% cheaper in certain specific cases.[15]

In May 2015, Wise was ranked No. 8 on CNBC's 2015 Disruptor 50 list,[16] and in August 2015, the company was named a World Economic Forum Tech Pioneer.[17]

On 8 April 2017, an internal memo from British bank Santander claimed the bank would lose 84% of its revenue from its money transfer business if its charges were the same as Wise.[18] Also in April 2017, the company announced the opening of its APAC hub in Singapore.[19] In 2019, the company announced opening an office in Brussels.[20] In May 2017, the company announced its customers were sending over £1 billion every month using the service,[21] and that the company turned profitable six years after being founded.[22]

On 21 January 2021, Sky News reported that Wise had appointed Goldman Sachs and Morgan Stanley as joint global co-ordinators for its planned initial public offering.[23] On 22 February 2021, the company rebranded from TransferWise to Wise.[24][25][26] As part of this rebranding, the company also launched a new website domain.[24] The company rebranded to reflect its expanded product offering beyond international money transfer.[27]

On 2 July 2021, it was announced in a prospectus published by the company that co-founder Taavet Hinrikus would step down as chair within a year.[28] It was also announced that David Wells would replace him in this position.

On 7 July 2021, Wise went public by a direct listing on London Stock Exchange and was valued at $11 billion.[29]

Funding[edit]

Wise received seed funding amounting to $1.3 million from a consortium including venture firms IA Ventures and Index Ventures, IJNR Ventures, NYPPE as well as individual investors such as PayPal co-founder Max Levchin, former Betfair CEO David Yu, and Wonga.com co-founder Errol Damelin.[30] Wise also received investment after being named one of Seedcamp 2011's winners.[31]

In May 2013, it was announced that Wise had secured a $6 million investment round led by Peter Thiel's Valar Ventures.[32] Wise raised a further $25 million in June 2014, adding Richard Branson as an investor.[33]

In January 2015, it was announced that Wise had raised a $58 million Series C round, led by investors Andreessen Horowitz.[34] In May 2016, Wise secured a funding of $26 million. This raised the company's valuation to $1.1 billion. As of May 2016, Wise has raised a total of $117 million in funding.[35]

In November 2017, the company raised a $280 million Series E led by Old Mutual Global Investors and IVP, as well as Sapphire Ventures, Japanese Mitsui & Co, and World Innovation Lab.[36]

In May 2019, the company had the secondary investment round of $292 million and reached the total valuation of $3.5 billion, more than double the valuation Wise achieved in late 2017 at the time of its $280 million Series E round.[37]

In July 2020, the company disclosed a secondary investment round of $319 million and reached the total valuation of $5 billion, led by new investor D1 Capital Partners and existing shareholder Lone Pine Capital. Vulcan Capital also came on board as a new investor, with Baillie Gifford, Fidelity Investments and LocalGlobe adding to their existing holdings.[38]

Criticism[edit]

In May 2016, Wise's claim "you save up to 90% against banks" was called misleading by the Advertising Standards Authority.[39]

In June 2020, after experts raised ethical and privacy concerns around the digital COVID-19 immunity passports Wise was helping develop, the company conceded immunity passports are not a "perfect solution" and co-founder Hinrikus said they would not be launched publicly until there was scientific consensus on COVID-19 immunity.[40]

References[edit]

  1. ^ Bryant, Martin. "Money may make the world go round, but at what cost?". BBC. Retrieved 1 April 2015.
  2. ^ "TransferWise Steps Toward Banking With Multicurrency Account". Bloomberg.com. 23 May 2017. Retrieved 31 May 2017.
  3. ^ Bryant, Martin. "TransferWise valued at bn by top Silicon Valley venture capital fund". The Independent. Retrieved 1 April 2015.
  4. ^ Temperton, James (3 November 2016). "Has Skype lost its way? Taavet Hinrikus reveals what the company taught him". Wired UK. ISSN 1357-0978. Retrieved 2 April 2019.
  5. ^ Price, Rob (27 January 2015). "London's $1 Billion Finance Startup TransferWise Is Just Like An Ancient Islamic Money Transfer System". Business Insider. Retrieved 19 October 2015.
  6. ^ Marco della Cava (18 August 2014). "London's TransferWise aims to disrupt banking". USA Today. Retrieved 19 October 2015.
  7. ^ Bennett Voyles (9 September 2015). "Online money transfers and the "Skype" of money". Forbes India. Retrieved 19 October 2015.
  8. ^ Leander Bindewald (8 July 2015). "You need never use a bank again. Here's why". The Guardian. Retrieved 19 October 2015.
  9. ^ Bryant, Martin. "Peer-to-peer currency exchange service Transferwise handles $13.4m in its first year". Insider. Retrieved 1 October 2012.
  10. ^ Silver, James (8 July 2012). "East London's 20 hottest tech startups". The Guardian.
  11. ^ "Startup of the Week: TransferWise". Wired. Retrieved 1 October 2012.
  12. ^ "The 2012 Startups 100: revealed". Startups. Retrieved 1 October 2012.
  13. ^ Taylor, Colleen. "5 Startups to Watch from Seedcamp's 2012 US Demo Day". TechCrunch. Retrieved 1 October 2012.
  14. ^ "Bitcoin | TransferWise Support & FAQ - International Money Transfer". transferwise.com. Retrieved 31 May 2017.
  15. ^ "TransferWise – Are they that cheap or is it just (inaccurate) advertising?". www.monito.com. Monito. 26 May 2016. Retrieved 21 November 2016.
  16. ^ "Meet the 2015 CNBC Disruptor 50 companies". CNBC. Retrieved 12 May 2015.
  17. ^ Barber, Lynsey (5 August 2015). "Four UK firms named tech pioneers by WEF". Retrieved 13 November 2016.
  18. ^ Collinson, Patrick (8 April 2017). "Revealed: the huge profits earned by big banks on overseas money transfers". The Guardian. ISSN 0261-3077. Retrieved 31 May 2017.
  19. ^ Russell, Jon. "TransferWise moves into Asia Pacific with opening of regional HQ in Singapore | TechCrunch". Retrieved 31 May 2017.
  20. ^ Megaw, Nicholas (10 January 2019). "Brexit drives TransferWise to open Belgian office". www.ft.com. Retrieved 10 February 2021.
  21. ^ CNBC.com, Neil Ainger, Writer at (17 May 2017). "Fintech unicorn Transferwise achieves first profit". CNBC. Retrieved 31 May 2017.
  22. ^ "TransferWise becomes profitable six years after being founded". BBC News. 17 May 2017. Retrieved 31 May 2017.
  23. ^ Kleinman, Mark (21 January 2021). "TransferWise picks banks to spearhead blockbuster flotation". Sky News. Retrieved 11 February 2021.
  24. ^ a b O'Hear, Steve (22 February 2021). "TransferWise rebrands as Wise ahead of an expected IPO". TechCrunch. Retrieved 22 February 2021.
  25. ^ Pratty, Freya; Lewin, Amy (22 February 2021). "TransferWise becomes Wise". Sifted. Retrieved 22 February 2021.
  26. ^ Musgrove, Annie (22 February 2021). "Transferwise rebrands to Wise". Tech.eu. Retrieved 22 February 2021.
  27. ^ "TransferWise becomes Wise". Sifted. 22 February 2021. Retrieved 22 February 2021.
  28. ^ Megaw, Nicholas (2 July 2021). "Wise co-founder Hinrikus to step down as chair within a year". Financial Times. Retrieved 7 July 2021.
  29. ^ Ramnarayan, Abhinav; Adinarayan, Thyagaraju (7 July 2021). "Wise valued at $11 billion in record London direct listing". Reuters.
  30. ^ Johnson, Bobbie. "Transferwise unveils Levchin, other superstar backers". Gigaoam. Retrieved 1 October 2012.
  31. ^ "TransferWise". Seedcamp. Retrieved 1 October 2012.
  32. ^ O'Hear, Steve. "P2P Currency Exchange TransferWise Raises $6M Led By Peter Thiel's Valar Ventures, With Participation From SV Angel, Others". TechCrunch. Retrieved 12 July 2013.
  33. ^ O'Hear, Steve. "Now Backed By Sir Richard Branson, TransferWise Raises $25M For Cheaper Money Transfers". TechCrunch. Retrieved 9 June 2014.
  34. ^ Price, Rob. "London Cash Startup TransferWise Is Now Worth $1 Billion". BusinessInsider. Retrieved 31 March 2015.
  35. ^ O'Hear, Steve. "Money transfer company TransferWise raises further $26M at $1.1B valuation". TechCrunch. Retrieved 25 May 2016.
  36. ^ "TransferWise Announces $280M Investment Round as Company Focuses on New Products and APAC Expansion". IVP. 2 November 2017.
  37. ^ "TransferWise now valued at $3.5B following a new $292M secondary round". TechCrunch. Retrieved 22 May 2019.
  38. ^ "TransferWise confirms new $5B valuation following $319M secondary share sale". TechCrunch. Retrieved 29 July 2020.
  39. ^ "ASA Ruling on TransferWise Ltd". 4 May 2016. Retrieved 21 November 2016.
  40. ^ Browne, Ryan (3 June 2020). "Start-ups are racing to develop Covid-19 'immunity passports' — but experts warn they're unethical". CNBC. Retrieved 11 February 2021.

External links[edit]