July 28, 2020 / 11:01 PM / 18 days ago

TransferWise completes $319 million secondary share sale at a $5 billion valuation

July 28 (Reuters) - London-based money transfer startup TransferWise said on Tuesday it has completed a $319 million secondary share sale valuing the company at $5 billion.

The company had been valued $3.5 billion in its last secondary raise in May 2019, it said.

The round, which provides a way for existing backers to sell some shares and others to join or buy more, was led by existing investors Lone Pine Capital and new investors D1 Capital Partners, TransferWise said.

Vulcan Capital also joined, while Baillie Gifford, Fidelity Investments and LocalGlobe expanded their existing holdings, the company said.

Founded in 2011, TransferWise is one of Europe’s best-known financial technology startups. It has more than 8 million customers worldwide and processes £4 billion ($4.96 billion) in cross-border transactions every month. It has risen to prominence among consumers by seeking to offer a less expensive and more user-friendly alternative to banks for international transfers.

TransferWise is profitable and did not need new investment to grow but completed the secondary share sale in response to continued interest from both existing and new investors, said Chief Executive Kristo Käärmann.

“We’ve rejected the Silicon Valley approach of burning cash for hypergrowth, and built a unique model of making a modest profit on every transaction,” Käärmann told Reuters in an email.

The company has been expanding beyond its core offering to a wider range of banking products. Since 2017 it has offered multi-currency accounts which allow customers to store money in 54 different currencies.

Last month TransferWise said it has received permission from the UK’s financial watchdog to offer retail investment services in Britain. (Reporting by Anna Irrera in New York Editing by Matthew Lewis)

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