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Wise is good, but is it a sound investment?

The imminent direct listing of money transfer specialist Wise reopens the age-old debate on whether a service that is great for consumers is necessarily a winner for shareholders
Wise is good, but is it a sound investment?

 

  • Wise (formerly TransferWise) will come to the London Stock Exchange via an unusual direct listing
  • Investors include PayPal co-founder Peter Thiel, Baillie Gifford and bigger banking outfits like Mitsui

Anyone who has tried to send money abroad using the traditional banking route will understand the frustration when recipients sometimes received up to 7 per cent less than they had expected. A thicket of hidden charges, market-defying exchange rate spreads and, presumably, a handy charge for “extra trouble occasioned” has long given corresponding bank transfer services a deservedly bad name. However, where there is a need, the market finds a way, and investors will soon get a closer look at a properly big fintech company as money transfer specialist Wise (formerly TransferWise) comes to the LSE via an unusual direct listing.

Founded in 2011, the company was started by two Estonian entrepreneurs with a background in forex. The company has grown rapidly and has over 6m active customers and handles £4.5bn of currency movements a month. It has raised over $396m over five funding rounds, with secondary share sales in 2019 and 2020 bringing total capital raised to just over $1bn. PayPal co-founder Peter Thiel is an investor, while Richard Branson’s beard lurks somewhere in the background, as well. The investor list also contains specialist tech funds from the likes of Baillie Gifford, along with bigger banking entities like Mitsui.

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