Wise, previously known as TransferWise and specializing in money transfers, debuted on the London Stock Exchange on Wednesday. The operation now values British fintech at no less than $11 billion.
Its first steps on the stock market took place via a direct listing after a few hours of bidding, which resulted in a price of 8 pounds ($11) per share. This is a major move for the London Stock Exchange as it seeks to attract tech startups post-Brexit.
Around 12:40 p.m., the stock rose 1.57%. The company was valued so far at $5 billion following a financing in July 2020. In an attempt to avoid high intermediary costs and communication costs, Wise opted for a direct listing.
By listing its shares directly on the stock exchange, it will be able to enter the market without raising funds from investors, allowing its existing shareholders to grow their investment.
The IPO “will expand Wise’s shareholding and support our mission to move money around the world faster, more economically and more easily,” said Kristo Käärmann, CEO and co-founder of the company, in a press release at the end of June.
The company, created in 2011, said it gained new customers during the pandemic, with an increase in the volume of transactions, explaining that individuals and professionals alike have sought alternatives to transfer money during this period.
Unlike many fintech that struggle to make money, TransferWise has been profitable since 2017. In the fiscal year ended at the end of March, the company had 6 million active customers. It has 17 offices around the world and employs around 2,400 people.
Susannah Streeter, analyst at Hargreaves Lansdown, says her growth prospects may convince investors, but warns of the many risks. “The company faces a lot of competition in a rapidly changing payments world and to remain competitive it may have to cut commissions faster than it cuts costs,” she warns.
London Stock Exchange Test
The Wise transaction could be good news for the London Stock Exchange, which is seeking to gain competitiveness since Brexit, and illustrates the growing interest of technology companies for direct listing which is on the rise in the United States.
For Ms Streeter, the listing of Wise “is going to be a new test for London as a place for fintechs, as the UK has to deal with its post-Brexit status and has difficulty attracting high-priced companies to the stock market. growth”.