Following its second investment round, TransferWise has now become the most valuable financial technology startup in Europe with a valuation of $3.5 billion. The London-based international money transfer services recently announced its second round with the goal of generating $292 million. The round would value the company at double its previous valuation in 2017 following its Series E investment round.
The secondary funding round will actually not add any new cash to the firm's ledgers given that the liquidity will be coming from existing shareholders who are selling all or a portion of their holdings. This would essentially give early investors a chance to sell their stake in the company. According to the company, they already have enough cash in their balance sheets and the point of the new round isn't to generate any new capital.
The new round is being led by growth capital investors Lone Pine Capital, Vitruvian Partners, and Lead Edge Capital. The firms all bought shares from existing investors, further expanding their stake in the company. Some early investors such as Andreessen Horowitz and Baillie Gifford decided not to sell their holdings and instead chose to increase their positions instead.
TransferWise has been able to take on the money transfer industry by storm through a number of innovations that make it a formidable foe against giants like MoneyGram and Western Union. The company has been able to do this with substantially lower fees and an intuitive new online platform that is both easy to use and convenient for users.
The company's platform also allows customers to track their transfers in real time as well as view all related fees. According to TransferWise, they are continually pushing to be more transparent to customers in terms of showing them all related bank fees and currency exchange charges. The firm's co-founder and CEO Taavet Hinrikus told reporters that their business is aimed at being fully consumer friendly; a task that was apparently very difficult to achieve.
TransferWise recently reported net profits of $7.9 million for the fiscal year ending on March 2018. Meanwhile, its annual revenue more than doubled to around $147.58 million.
The company's user base has also grown, with the firm revealing that they are getting around 10,000 new customers per month. Its total transactions per month have now reached more than $5 billion from its existing 5 million customers. Talks of a possible IPO have so far been denied, with the firm stating that growth is still its number one priority. The company plans to expand its 1,600 employee count with more outlets to be put up in the coming months.
