The international money transfer company TransferWise recently announced it has raised $280 million in new investment. The London based startup’s funding round was led by asset manager Old Mutual Global Investors and Silicon Valley venture capital firm IVP. Previous backers, who also reinvested as part of the fundraising, include venture firm Andreessen Horowitz and billionaire Richard Branson. On Thursday the company said it will use the cash injection to expand its strives and global presence.
Kristo Kaarmann, TransferWise co-founder and chief executive, recently said this investment round “reflects the opportunity that investors see, in services that used to be run by banks but have been taken over by tech companies who are able to do the same things cheaper and more pleasantly”. Kaarmann also noted that Asia will be key to the company’s growth.
TransferWise has emerged as one of Europe’s largest financial technology startups; making it both cheaper and simpler for consumers and small businesses to send money internationally online by offering a peer-to-peer (P2P) international money transfer service that bypasses banks.
San Francisco based Sapphire Ventures and US-Japan venture capital firm World Innovation Lab joined this latest funding round. Since its founding in 2011, TransferWise has raised ~$397 million. It has been reported that the latest round values the company at $1.6 billion; $500 million more than the last time the company was valued in May 2016. However, it is not known how much of the new investment is newly received capital or secondary investment.
TransferWise was founded by Estonian’s Taavet Hinrikus and Kristo Käärmann back in 2011. The startup has grown to transfer ~$1.2 billion in fund for its customers monthly; becoming profitable for the first time only this year. The company currently servers more than 2 million customers with more than 750 currency routes.
“TransferWise is in a pretty strong place today, we are moving significant amounts of money on a monthly basis. But we are still pretty tiny in the grand scheme of things, there are still many trillions of dollars that are moving cross-border,” finance director Matthew Briers at TransferWise told Reuters.
With its increased source of cash, TransferWise has now sets its focus on expansion across the Asia-Pacific, including India. The company launched in Singapore in July last year and just recently set up an office there to support its expansion across the region. TransferWise is already moving $700 million on an annual basis through Singapore, with its users ranging from students studying abroad to pensioners who’ve retired abroad.
“Our work is just starting. Most of the volume is still with banks, so there are still huge opportunities for growth,” Kaarmaan has said.
The company has also said they are planning expand their “borderless bank account” that lets businesses store money in different currencies. The service, which is already available to customers in Europe, provides companies with local account details thus allowing them to perform transactions in the local currency, in turn avoiding cross-border charges typically imposed by banks. The service is expected to be available in Singapore by next month. Additionally, TransferWise is looking to roll out a similar “borderless” service to those in Europe; providing individual consumers an account and debit card.
“A company owner needs just 40 seconds to open bank accounts all over the world. Even individuals, like freelancers who work around the world, find it useful,” Kaarmaan said in regard to TransferWise’s borderless bank account service.
TransferWise serves more than 2 million customers across 42 countries, with 800 employees working in hubs around the world.
“We have a mission to bring TransferWise to everyone in the world who needs it. Today, customers send well over [$1.3 billion] using our platform each month for every conceivable reason — whether to help out relatives back home, pay bills overseas, or expand their own business into new territories. But 1 billion [dollars] 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,” TransferWise cofounder and chairman Taavet Hinrikus said.
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