TransferWise valued at $5bn after secondary share sale


Daniel Webber
Daniel Webber
Founder & CEO
Daniel is Founder and CEO of FXcompared and FXC Intelligence and has 18 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors.… Read more
  • The online money transfer firm gets a huge boost after a secondary share sale backed by both new and existing investors.
  • The firm did not use the opportunity to raise additional cash but instead allowed individuals – such as early investors – to gain access to cash.
  • “This secondary round provides an opportunity for new investors to come in, alongside rewarding the investors and employees who’ve helped us succeed so far,” said one of the co-founders.

The international money transfer institution TransferWise has been valued at $5bn after it held a secondary share sale, it has been confirmed.

The company, which is based in London and has been in existence for almost a decade, said that it did not need to gain extra money from the share sale.

Instead, the firm’s original investors and some of its current workers will benefit from the sale.

Overall, the deal is understood to be worth around $319m.

This has happened before – during a previous secondary round last year, the firm was valued at $3.5bn.

Overall, that round was worth $292m.

The rise was attributed by some in the money transfer field to the coronavirus pandemic, with some suggesting that the firm’s capacity for digitalised cross-border payments was now even more desirable.

The firm, which has around eight million customers around the world and is responsible for £4bn in international money transfers every month, shared some more details about the share sale in an interview with the financial press.

The firm’s chief executive officer and co-founder, Kristo Käärmann, said that the firm did not need extra cash and that it had been financed by its clients for a long time.

“We’ve been funded exclusively by our customers for the last few years and we didn’t need to raise external funding for the company,” he said.

“This secondary round provides an opportunity for new investors to come in, alongside rewarding the investors and employees who’ve helped us succeed so far,” he added.

And in a bold move, the firm also divulged several other details of the transaction.

Käärmann is not the only co-founder of TransferWise.

He and the other co-founder, Taavet Hinrikus, were both given a chance to sell their shares.

However, it is not clear how many shares they cashed in.

The firm also confirmed that it did not use the services of an intermediary to settle the sales.

According to press reports, the round was co-led by two firms.

Lone Pine Capital, which has already invested in TransferWise, was one of them, and a fresh investor, D1 Capital Partners, also co-led.

In terms of non-leading investors, meanwhile, firms such as Vulcan Capital were on the list.

Pre-existing TransferWise backers LocalGlobe, Fidelity and Baillie Gifford also raised the amount of stock that they have.

To discover more about all of the latest goings-on in the online money transfer world, why not head over to our news pages for informative articles about recent developments? Just click here.

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