The moment has finally arrived, and TransferWise, the largest international money transfer company is going on an IPO. This is somewhat of a pivotal moment for the money transfer industry, and in this article we will try to explain why is it pivotal, and what do we think of Wise (formerly TransferWise) as an investment and try to predict its popularity. Please be advised that this is not financial advice nor investing advice, we are simply trying to convey our thoughts on the topic as industry professionals.
We have been reviewing companies such as Wise money transfer, covering extensively Wise’s exchange rates, and even making related comparisons such as Wise vs WorldFirst, Wise vs PayPal and Wise vs Payoneer (another payment company that has recently gone on an IPO). As you understand by now, we feel like we have been covering Wise (or TransferWise, how it was called prior) for just enough years to tell you exactly what they’re about.
When is Wise going on an IPO
As reported on TechCrunch, TransferWise, which has been rebranded to Wise just over the past few months, has confirmed the long-time rumors about its Initial Offering and made a statement that the IPO will take place in the London Stock Exchange. The valuation was estimated to be 6 to 7 billion dollars.. and the valuators were no others than Wise themselves (link to PR).
Why is Wise going on an IPO
That’s somewhat of a broad question – why is Wise going on an IPO, but it’s an intelligent one. If TransferWise/Wise is profitable and growing at a staggering rate (reported 4th year of profitability and doubled growth in 2020 compared to 2019, with more than £20m in profit that year – then why would its investors share it with the public?
It is our editor’s opinion that the reason could be that it’s a company that nets £20m in profit each year that is going to be valued, by its own valuation which must be based on the roadshow, at a minimum value of £6bn! That is x300 valuation on profit. Whoever invested in TransferWise in whichever funding round is going to make good money, while early investors, founders, key employees and other parties that managed to snag a bunch of stocks early on…. are going to face what could be life changing money (other than the poor VCs who joined in at 5bn valuation at July 2020, maybe).
There’s demand in the public for more fintech and Wise is a very good fintech company and they must believe it’s a good timing to capitlise on the craziest stock markets of all times. That why we believe they are going on an IPO.
Is Wise the first money transfer company specialising in international transfers to go on an IPO?
OFX is an old-timer in this industry who are doing tremendous job running a similar-to-Wise operation going with a few more functions and is listed on the Australian stock exchange. XE and several other money transfer and payment companies are owned by Euronet Worldwide which is a public company. There are other examples but the answer is no, Wise is not the first money transfer company to go on an IPO, but it’s certainly the first at this massive scale… in July 2021 they have released the following numbers – 8 million customers and £4bn in money volume transferred across borders. OFX which is definitely a large company but it has reported a volume of AU$20bn … per year! (based on these figures I found, TransferWise is as x4 bigger in volume).[Ant Financial which owns WorldFirst almost filed for an IPO but was eventually blocked.]