TransferWise Valued at $3.5 Billion in Secondary Offering

TransferWise leapfrogged fintech startups, more than doubling its valuation to $3.5 billion in a fundraising round that pushes back the need for an initial public offering, according to Bloomberg.

Funds managed by BlackRock joined in the $292 million investment round that was led by Lead Edge Capital, along with Lone Pine Capital and Vitruvian Partners, London-based TransferWise said in a statement. Existing investors Andreessen Horowitz and Baillie Gifford & Co., the Scottish investment manager, increased their stakes.

"Back in the old days, we would have been a public company by now," Taavet Hinrikus, TransferWise’s co-founder and chairman, said in an interview. TransferWise still might go public someday, but the secondary offering brings the company potentially several more years until it would need to take that step, he said.

The share sale by the eight-year-old company underscores the boom in startups that have sought to take on established financial companies by lowering costs and offering simpler solutions for consumers. The firm has than 5 million users and handles more than 4 billion pounds in payments every month.

Its valuation increased from the $1.6 billion in its November 2017 round, when it raised $280 million. It passed other fintech startups that have yet to go public, including Revolut, Germany’s N26 and Swedish payment firm Klarna Bank. It’s worth three times more than Funding Circle, another London-based startup that went public last year.

TransferWise has been profitable since 2017, Hinrikus said, and the secondary offering enabled early individual backers and employees to turn their equity into cash, he said. "I am super excited that we can turn this monopoly money for employees into real dollars," Hinrikus said, referring to the stock options TransferWise grants all of its employees.