Wise plans to go public in London via direct listing

In this photo illustration, the TransferWise logo is displayed on an Android mobile phone.

Omar Marques | SOPA Pictures | LightRakete | Getty Images

LONDON – UK financial technology company Wise said Thursday it expected to go public on the London Stock Exchange through a direct listing.

Wise, formerly known as TransferWise, said it is aiming for a direct listing rather than an IPO as it does not need to raise new capital. Direct listings enable companies to go public without the involvement of underwriters or the issue of new shares.

The company said its public debut will be the first direct listing of a technology company in London.

Founded in 2010, Wise claims it has 10 million customers who use its money transfer service to transfer £ 5 billion ($ 7 billion) each month. The company competes with established companies like Western Union and MoneyGram, and upstarts like Revolut and WorldRemit.

The news of Wise’s debut is a big win for the UK, which is hoping to convince more big tech companies to get listed in London rather than New York. The government is considering proposals to relax London’s listing rules to facilitate the issuance of double-class shares, which will give founders and early backers more control.

“Wise is used to questioning convention and this listing is no exception,” said Kristo Kaarmann, CEO and co-founder of Wise.

“We have been developing a new way to move money around the world for the last ten years – faster, cheaper, easier, and completely transparent. A direct listing allows us a cheaper and more transparent way of keeping Wise ownership in line with to expand our mission. “

Wise opts for a two-class share structure in the standard segment of the main London market. The company announced that it will issue two classes of shares, Class A and Class B. Class B shares entitle holders to an additional 9 votes per share. They are not tradable, will not be listed and will expire on the fifth anniversary of Wise’s listing, the company said.

The structure means that Kaarmann has more voting rights than other investors, however, no existing shareholder will have more than half of the voting rights simply by owning class B shares. Investors have raised concerns about governance issues in dual class structures in the past, but Wise says their structure is fair and democratic.

Wise said it will also introduce a customer shareholder program called OwnWise, which would allow users to own an interest in the company. Customers who participate in the program will be eligible for bonus shares worth up to £ 100 after 12 months. In addition, they receive further discounts, such as invitations to semi-annual “mission days”.

“I hope Wise has given other UK tech companies an alternative route to the public markets to ensure we have a thriving tech scene for decades to come,” said Stephen Kelly, chairman of the Tech Nation industry association.

“Britain needs more figureheads and role models to inspire the next generation and it is good to see Wise live its values ​​and join the London Listing family.”

Wise, which has been profitable since 2017, said it had a profit of £ 30.9 million on sales of £ 421 million in fiscal 2021. Income more than doubled from £ 15 million last year, while revenues are up 39% from £ 302.6 million.

Goldman Sachs, Morgan Stanley and Barclays will serve as lead financial advisor to the listing of Wise, with Citi serving as co-advisor.

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