© 2020 – 2024 AEA3 WEB | AEAƎ United Kingdom News
AEA3 WEB | AEAƎ United Kingdom News
Image default
IT

From losing £500 to going public in London through a direct listing: One Wise decision

Based out of London, Wise (previously TransferWise) is a money transfer service allowing private individuals and businesses to send money abroad without hidden charges. 

Recently, the UK fintech company announced its plans to go public on the London Stock Exchange through direct listings. In general, direct listing allows companies to go public without raising any money or issue new shares. 

Why direct listing?

According to Wise, it is opting to list directly rather than Initial Public Offering (IPO) without raising any money. To date, no companies have listed directly except for the London Stock Exchange itself. 

This is big news for the UK as it is hoping to convince tech firms to list in London than New York. Moreover, the government is considering relaxing London’s listing rule making it easier to issue dual-class shares, which gives founders and early backers more control.

Co-founded by Taavet Hinrikus and Kristo Käärmann in 2011, Wise is all about moving money worldwide in the best possible way. With the Wise account, people and businesses can hold 55 currencies, transfer. 

How Wise was born?

Both Käärmann and his-cofounder Taavet are from Estonia. Taavet, who was the first employee at Skype, lived in London but got paid in euros. 

On the other hand, Kristo worked for Deloitte, also lived in London, and got paid in pounds. But he had a mortgage in euros back in Estonia.

At that time, he thought it would take him €15 to transfer each time since it was mentioned on the paper. However, he didn’t know about the hidden costs that come along. 

“So I paid my UK bank a £15 fee and transferred the £10,000, and then a week later I saw that £500 less than I had expected had arrived in the Estonian account,” says Kristo.

“I started digging to find out what had happened, and I realised that I had been incredibly stupid.

“I had foolishly expected that my UK bank would have given me the exchange rate I saw when I looked on [news wires] Reuters and Bloomberg.”

To make it simple, he was charged an extra €500 for each transfer. 

Taavet, on the other hand, had a similar situation. They knew there had to be a better way. So they put their heads together and invented a simple workaround.

However, it took around six months to work on the ideation of the product. Initially, they focused on bootstrapping, but co-founders realised the need for scaling up their company as they grew. And that’s when they raised $1.3 million from IA ventures. 

£3.5B valuation

The company has so far raised $1.1 billion (approx £784 million) to date at a valuation of $5 billion (approx £3.5 billion)

Around 10 million people and businesses use Wise, which processes over £4.5 billion in cross-border transactions every month, saving customers over £1 billion a year. 

The post From losing £500 to going public in London through a direct listing: One Wise decision appeared first on UKTN (UK Tech News).

Related posts

IT firms ramp up prices to drive post-pandemic revenue

AEA3

Europe’s startup job openings drop by 40%

AEA3

DrayTek patches SOHO router bug that left thousands exposed

AEA3