One of Britain’s biggest financial technology companies - Wise, made a smashing debut on the London Stock Exchange as a public company on 7th July 2021.
This will be a testing ground for London’s fintech sector post Brexit. According to statistics from Wise's prospectus, the business began trading at 800 pence in London, giving Executive Chairman Hinrikus and Chief Executive Officer Käärmann shares worth nearly $2 billion and $1 billion, respectively. Investor interest was robust on the first day of the listing, with bids spanning from 100p to 1,000p for shares priced at 800p.
Wise went for a direct listing to avoid speculation hovering over their valuation. IPO-WISE.L share price or Wise was determined by an auction procedure before the launch of formal London trading, and the indicated mid-price was 750 pence. The digital payments provider has a total of ten million customers and businesses who transact approximately £5 billion in cross-border transactions each month. The company has just added additional assets to diversify its revenue. Its revenue climbed from $422 million to $586 million in the most recent financial year. It indicates a profit before tax of $57 million (£41 million) – the company claims it has been profitable since 2017.
Wise - formerly known as TransferWise is a UK-based money transfer application started in 2011 by Kristo Käärmann and Estonians Taavet Hinrikus.
They both laid the foundation stone of Wise after facing a lot of frustration by the hefty fees associated with transferring money between Estonia and the United Kingdom. They devised a novel method for making cross-border transfers at real exchange rates. Since its onset, the company has grown to millions of users throughout the world, processing £54 billion (about $74.7 billion) in payments in just 2021.
With its public listing, Wise will soon join the list of other multibillion-dollar unicorns such as Checkout.com and Revolut, which were recently marketed. According to Refinitiv pricing, WISEa.L, Wise's Class A shares would give the fintech company a market capitalization of well over 7 billion pounds ($9.66 billion).
The company made its first profit in 2017 thanks to its minimal fee structure compared to other cross-border digital money transfer options, as well as a rising personal peer-to-peer service that allows enterprises to make speedier payments. Wise doubled its profits from the previous fiscal year to £30.9 million in the fiscal year 2021. Moreover, the revenue climbed 39% to £421 million. Käärmann and Hinrikus own 18.8% and 10.9 percent of the company, respectively. The company’s external investor Peter Thiel's Valar Ventures owns 10.2% of the stake.
Wise account balances are held in over 55 currencies, and they've teamed with banks and firms such as GoCardless, Bolt, and Monzo, to provide better international banking to their clients. Their investors include big names like IA Ventures, Silicon Valley giants Andreessen Horowitz, Paypal co-founder Max Levchin, and Richard Branson among others. Chrysalis Investments analysts estimate that the listing will contribute between 6% to the company's net asset value. Wise's early funders, such as Index Ventures and Seedcamp, would earn lower profits as a result of their decision to cash out early.