By Emily Nicolle on 2nd November 2017
The international money transfer service raised $280m in a Series E round as it plans for global expansion and challenge to banking disruptors.
The round was led by asset management firm Old Mutual Global Investors (OMGI), investing funds managed by its small and mid-cap UK equities desk, and Silicon Valley venture capital firm IVP.
The deal is OMGI’s second ever equity investment in a private company, after it invested $165.7m in beauty retailer The Hut Group earlier this year. It’s also a new move into finance and into Europe from IVP, which counts Snap, Dropbox and Twitter in its portfolio.
New investors included Sapphire Ventures, Mitsui & Co. Ltd, and the US-Japan venture firm World Innovation Lab. The round was also backed by existing investors, venture firm Andreessen Horowitz and UK asset manager Baillie Gifford, as well as Virgin Group founder, Richard Branson.
To date, the company has now raised $397 million, and has been profitable since early 2017. Multiple sites have also reported a source close to TransferWise valuing the platform at $1.6 billion.
TransferWise’s co-founders, Taavet Hinrikus and Kristo Kaarmann, sold some of their own shares, as well as the shares of some of its early employees, to investors as part of the deal. This latest move would seem to suggest that a initial public offering is a long way off, relieving pressure on the firm for a number of years.
The new funds are reportedly to be used for expansion across the APAC region, with Hinrikus stating that the company expects to offer a full range of services in India within the next year. In 2016, a hub office was opened in Singapore, with satellite offices in Tokyo and Sydney.
The company announced its new Borderless account in May, which allows SME businesses and sole traders in the US and Europe to hold money in up to 28 currencies. An expansion into consumer banking, in the form of an account and debit card, is planned for 2018, looking set to challenge rival banking app Revolut.
Jules Maltz, General Partner, IVP, commented on its excitement to partner with Transferwise, saying: “It’s rare for us to make an investment in a European company but this opportunity was too good to miss.”
Likewise, Richard Watts, Fund Manager for the UK Mid-Cap Fund at OMGI adds: “Our team looks to invest in companies with the potential to significantly disrupt an industry. The opportunity to invest now in a private company, with a hugely exciting global growth story, is particularly compelling and we believe this holding will benefit investors in the funds we manage.”
Hinrikus also made a statement: “Today customers send well over a billion pounds using our platform each month for every conceivable reason. But £1bn is just a slice of the market, which means millions of people are still being ripped off by banks and traditional currency brokers every day. It’s great to have the support of Old Mutual Global Investors and IVP in bringing fair and transparent financial services to more people through our Borderless account.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.