Wise considers rare direct listing on London Stock Exchange

Wise, a $5 billion-valued money transfer fintech which grew out of the UK, is reportedly mulling a rare direct listing on the London Stock Exchange (LSE).

According to Sky News, the start-up known until last month as TransferWise is thinking about circumventing the conventional initial public offering (IPO) process.

This would see fintech, planning to go public this year, avoid raising money from a sale of new shares which happens in an IPO.

Whilst this would mean Wise misses out on boosting its balance sheet, it would shorten the flotation process and cut out the majority of adviser fees. The company is working with Goldman Sachs and Morgan Stanley.

Wise’s Estonia-born co-founders, Kristo Käärmann and Taavet Hinrikus, would both become paper millionaires out of the listing. They own some 40% of the fintech between them.

Other shareholders include Sir Richard Branson, and a Silicon Valley fund called IVP.

The firm, founded in 2011, originally started as a money transfer service between international consumers.

Since then, the fintech has raised more than $1 billion in funding across 12 rounds. It also has some nine million customers.

The fintech, which now employs 2,200 people, landed a $3.5 billion valuation in 2019. It then hit a valuation of $5 billion in July 2020, following a $319 million liquidity round.

The same year, Wise landed a licence from the Financial Conduct Authority (FCA) to offer retail investment services in the UK.

While the company has made little noise about a transition into full-fledged banking, it did nab an Australian banking licence in December 2020.

“We’ve evolved to fix more than just money transfer, but the core experience of using Wise will remain faster, cheaper, and more convenient than anything else,” says Käärmann.

The brand switchover sees the company offering three products: Wise, Wise Business, and infrastructure-based Wise Platform.