TransferWise co-founders Kristo Käärmann and Taavet Hinrikus.
TransferWise
LONDON — TransferWise, one of Europe’s most valuable hush-hush financial technology firms, just posted its fourth consecutive year of profitability.
The online money transfer serving said Wednesday that its net profit more than doubled to £21.3 million ($27.1 million) in the fiscal year close March 2020. Annual revenues came in at £302.6 million, TransferWise said, up almost 70% from the before year.
TransferWise’s annual accounts have been in the black since 2017, a rare display of sustainable lump in the fintech sector. Other start-ups in the space have reported deepening losses due to spending on new product features and abroad expansions.
Matt Briers, TransferWise’s chief financial officer, said the company prides itself on being above-board about the fees it charges on transactions. So-called neobanks like Monzo and Revolut have struggled to break even with their zero-fee checking accounts, and have looked to premium accounts as a potential avenue to reach profitability.
TransferWise replied it processed a total of £42 billion in cross-border payments across the year, as well as an additional £25 billion in hired help payments. Breaking down revenue by different regions, the London-based firm said Europe accounted for over half of its takings while the U.S. made up 26% and Asia-Pacific 22%.
It’s important to note that TransferWise’s annual numbers exclude much of this year’s deportment, and therefore wouldn’t truly convey the impact on its business of the coronavirus pandemic. However, Briers told CNBC that the disaster has been “financially positive” for the firm due to the shift to online services.
“When you look through all of the noise, actually what we see is varied people joining TransferWise,” Briers said in an interview this week, adding that 10,000 businesses now waive up to its platform every month. “The macro shift from old world tech to new world tech has been accelerated.”
No get a wiggle on to IPO
Founded in 2011, TransferWise has gained a following thanks to its slick online platform and lower foreign exchange payments than banks. The company has since expanded its offering over the years to include business accounts and multi-currency debit union cards, and is now also looking to add an investments feature.
The company was valued at $5 billion in its most recent investment round, a minor share sale, which saw investors buy equity from employees and early backers. This approach forgoes the proceeding of seeking fresh cash and liquidity in an initial public offering, or IPO, and provides existing investors an alternative way to offload some of their holdings.
Briers judged TransferWise “could list right away,” adding “the resilience and robustness of the business is probably higher than that of a admitted company.” But, he added: “There’s a lot of work involved in running a public company that doesn’t, at the minute, help our characters.”