TransferWise poised to sell off shares

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Daniel Webber
Daniel Webber
Founder & CEO
Daniel is Founder and CEO of FXcompared and has 18 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely… Read more
  • Digital payments brand TransferWise will have a share sale and it will be handled by Goldman Sachs
  • The brand has been around since 2011 but is now processing millions of dollars in payments per month
  • The share sale is still in its very early stages, according to insiders

 

TransferWise is about to become one of the United Kingdom’s most prized paytechs, but the news hasn’t been confirmed. According to reports, the company is planning a share sale of approximately $200m (£153m). The brand’s $4 billion valuation will be more than twice once, or if, the deal happens, observers note, giving the company dominance in the fintech sector.

The deal will be handled by Goldman Sachs, Sky News says. It is noted, however, that the plan is still in its early stages and that an official announcement is unlikely to happen in the coming days. Both TransferWise and Goldman Sachs declined to release a statement.

The brand, although still described as a British fintech, has decided to move its operations to Brussels due to the uncertainties plaguing Brexit. Observers say that it is still technically a UK company.

TransferWise was established in 2011 and is still relatively young. Despite its start-up status, the company now transfers £3bn a month, saving approximately £3m in foreign exchange fees every day. The two entrepreneurs behind the brand founded TransferWise due to their frustration with overseas transfer rates.

In 2011, the only way to transfer money internationally was through banks or old remittance giants the likes of Western Union. Hinrikus and Kaarmann, the two founders, were working in the United Kingdom at the time and found that sending money to their home country Estonia costs too much.

In 2017, six years after they established TransferWise, Hinrikus and Kaarmann swapped roles. Hinrikus became Chairman of the brand while Kaarmann assumed the Chief Executive Officer position. The two are thought to own around 40% of the brand which means that they are worth an estimated $800 million each.

One source says that a significant demand from investors is very likely once the share sale is announced by TransferWise. Current shareholders believe that the brand’s value will “soar much higher” after the sale. Existing shareholders include Silicon Valley’s IVP and Sir Richard Branson. While news about the share sale has reached news agencies, it is not clear whether Goldman Sachs has already started talks with prospective investors.

The company previously raised new funding amounting to $400m (£300m). TransferWise reached unicorn status in 2015. The brand is still growing as it has launched a number of new products in recent years. This includes a borderless account that makes it possible for people to move their funds between a number of currencies.

The company has been getting a lot of attention since 2011 due to its innovative ways of driving down transfer costs. Its platform is also known to be quite efficient.

TransferWise currently employs over 1,000 people including over 200 in the British capital.

Get the latest developments in the paytech industry here.


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