Expert’s view

Wise: the ‘Robin Hood’ of currency exchange

What the fintech pundits said after the UK’s biggest tech flotation

Wise up 

“Blink and you missed it,” said Nils Pratley in The Guardian. The UK’s “biggest tech flotation” ever happened last week, “to about a hundredth of the pre-publicity generated by the overhyped and undercooked Deliveroo”. Wise – the profitable crossborder payments company formerly known as TransferWise – finished its first day in public form valued at a “punchy” £8.75bn, “more than twice its valuation at its last private funding round last year”. The company isn’t eligible for the FTSE 100 because its Estonian CEO and co-founder, Kristo Käärmann, “insisted on giving himself enhanced voting rights”, thus earning “a boo” from governance purists. “He gets a cheer, though, for demonstrating that appetite for high-growth, highly prized tech businesses is alive and well in London.” 

Robin Hood rides again 

Consumers should also be cheering, said Forbes. Käärmann and his partner Taavet Hinrikus started Wise after becoming, in their words, “sick of losing money” to banks in fees. The company, which has been dubbed “the Robin Hood of currency exchange”, charges less than 1% on many transfers compared with an average cream-off of more than 5% by mainstream banks. It’s certainly an impressive operation, said Zaven Boyrazian on The Motley Fool. It cleared £54bn across borders last year. And, unlike many young fintech companies, it’s actually profitable: it made £49.9m between March 2020 and 2021. But shares have already soared. By the start of this week Wise’s value had shot up to nearly £13.5bn, which should give wouldbe investors pause for thought. 

A coming of age 

Even allowing for the hype, “something astonishing is going on in fintech”, said The Economist. According to CB Insights, “one in every five dollars invested by venture capital this year” has gone into the sector, with deals and listings proceeding “at a frenetic pace”. Once the “insurgents of finance”, fintech firms “are becoming part of the establishment” – inexorably gaining critical mass. Their collective value has risen to $1.1trn – equivalent to 10% of the value of the global banking and payments industry. “Prices may be stretched today and some firms may flop, but in the long run it seems likely that this share will only rise.”

Recommended

Who’s to blame for UK’s looming Christmas crisis?
A man dressed as Santa Claus walks through Manchester city centre
Today’s big question

Who’s to blame for UK’s looming Christmas crisis?

Best properties: homes with lovely gardens
Houses with lovely gardens
The wish list

Best properties: homes with lovely gardens

Best podcasts: from Alan Alda’s science to Tim Dowling’s dog
Collection of podcasts
In Review

Best podcasts: from Alan Alda’s science to Tim Dowling’s dog

Book of the week: Crossroads by Jonathan Franzen
Jonathan Franzen
In Review

Book of the week: Crossroads by Jonathan Franzen

Popular articles

Why a ‘super-cold’ is spreading
flu_sneeze.jpg
Getting to grips with . . .

Why a ‘super-cold’ is spreading

Former nurse says NHS made her ‘fart against her will’
A nurse
Tall Tales

Former nurse says NHS made her ‘fart against her will’

The Queen’s biggest public gaffes
Queen with Duchess of Cornwall and Elin Jones
In Depth

The Queen’s biggest public gaffes

The Week Footer Banner