Wise Starts Trading On London Exchange At $11B Valuation

Money transfer firm Wise debuted on the London Stock Exchange (LSE) following a direct listing that opened at 800 pence and was up to 813 pence shortly after the market opened, Reuters and other news outlets reported on Wednesday (July 7). 

Wise — formerly TransferWise — has a valuation close to $11 billion and opted for a direct listing, which floats existing shares without creating new shares. The opening price is set by the market, and was estimated to be just under 800 pence, Reuters reported citing Refinitiv data. 

The direct listing process doesn’t use underwriters or other intermediaries and was pioneered by Spotify in the U.S. three years ago; it is an unusual maneuver for London. Slack and Coinbase used direct listings to go public. 

Although no underwriters are necessary for a direct listing, Wise was advised by Goldman Sachs and Morgan Stanley. The dual-class share structure gives CEO Kristo Käärmann enhanced voting rights for five years, an ownership scheme used by Facebook and Alphabet, CNBC reported.

Founded in 2011 by friends Taavet Hinrikus and Kristo Käärmann, the company competes with wire transfer giants Western Union and MoneyGram and FinTech newcomers Revolut and WorldRemit. Wise said it has more than 10 million users that send $7 billion cross-border every month.

The founders are Wise’s biggest shareholders, with Käärmann owning 18.8 percent and Hinrikus owning 10.9 percent. External investor Peter Thiel’s Valar Ventures holds a 10.2 percent stake in the London-based business, according to CNBC.

The listing is expected to be among the biggest floats in 2021. Wise broke even for the first time in 2017 and doubled profits to $42.7 million with revenue up 39 percent in fiscal year 2021. 

“We are here for a long-term mission. For the transition period of five years we are setting up this structure so we can focus on this mission,” co-founder and CEO Kristo Käärmann said recently.

Hinrikus, who was CEO for three years through 2017 before becoming chairman, is planning to leave the company sometime next year. David Wells, a past chief financial officer of Netflix, is taking the place of Hinrikus as a non-executive director at Wise.