Wise direct listing turns fintech founders into billionaires

The wise founders Taavet Hinrikus, left, and Kristo Käärmann.

wise

LONDON – The founders of the money transfer service Wise are now billionaires – at least on paper.

The British fintech firm, formerly known as TransferWise, went direct on the London Stock Exchange on Wednesday and valued the company at $ 11 billion.

Wise was founded in 2010 by Estonian friends Kristo Käärmann and Taavet Hinrikus. Frustrated with opaque bank charges for international money transfers, they found a new way to conduct cross-border transactions at the real exchange rate.

The couple would informally transfer money to one another by looking at the mid-market rate on a given day each month. This enabled them to get a fair exchange rate without paying additional bank fees.

Billionaire status

Just over a decade after founding Wise, the fintech company’s founders have risen to become billionaires.

With a market capitalization of $ 11 billion, Käärmann’s stake in the company is around $ 2.1 billion, while Hinrikus’ stake is worth $ 1.2 billion.

Wise declined to comment when contacted by CNBC.

Here’s who else got big out of Wise’s direct listing:

  • Peter Thiel’s Valar Ventures is Wise’s largest outside shareholder. Valar’s 10.2% stake is now worth around $ 1.1 billion.
  • IA Ventures, which owns 9.6% of the shares in Wise, has over $ 1 billion in shares.
  • Andreessen Horowitz’s Wise stake is now worth 9.3% to a billion dollars.
  • Baillie Gifford has a 4.9% interest valued at $ 536 million.

Because it is a direct listing, Wise’s private backers sell shares directly to the public. This is different from an IPO, where a company issues new shares to raise capital through a public offering.

Wise is a four-time CNBC Disruptor 50 company that was last ranked 23rd on the 2019 list.

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