TransferWise valued at $3.5 billion in latest fundraising round

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TransferWise Ltd. leapfrogged fintech startups, more than doubling its valuation to $3.5 billion in a fundraising round that pushes back the need for an initial public offering.

Funds managed by BlackRock Inc. joined in the $292 million investment round that was led by Lead Edge Capital, along with Lone Pine Capital and Vitruvian Partners, London-based TransferWise said in a statement Tuesday. Existing investors Andreessen Horowitz and Baillie Gifford & Co., the Scottish investment manager, increased their stakes.

"Back in the old days, we would have been a public company by now," Taavet Hinrikus, TransferWise’s co-founder and chairman, said in an interview. TransferWise still might go public someday, but the offering brings the company potentially several more years until it would need to take that step, he said.
The share sale by the eight-year-old company underscores the boom in startups that have sought to take on established financial companies by lowering costs and offering simpler solutions for consumers. The firm has than 5 million users and handles more than 4 billion pounds ($5.1 billion) in payments every month.

Its valuation increased from the $1.6 billion in its November 2017 round, when it raised $280 million. It passed other fintech startups that have yet to go public, including Revolut Ltd., Germany’s N26 GmbH and Swedish payment firm Klarna Bank AB. It’s worth three times more than Funding Circle Ltd., another London-based startup that went public last year.

TransferWise has been profitable since 2017, Hinrikus said, and the sale enabled early individual backers and employees to turn their equity into cash, he said.

"I am super excited that we can turn this monopoly money for employees into real dollars," Hinrikus said, referring to the stock options TransferWise grants all of its employees.

None of TransferWise’s institutional investors sold shares as part of the offering and Hinrikus and his co-founder, Kristo Kaarmann, who is the company’s chief executive officer, retain more than 80% of their shares in the firm.

The latest sale of shares brings investors’ total stake in TransferWise to $689 million, including the primary and secondary markets, the company said.

TransferWise currently employs 1,600 people across the globe, and plans to boost that by an additional 750 employees in the next 12 months. It’s hiring in London, New York, Singapore, Budapest and Tallinn, Estonia, among other locations, adding engineers, data scientists and people working on product development.

Bloomberg News
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