Wise IPO Maps The Digital Transformation Of X-Border Money Movement

In an age of stock market debuts across various verticals and listing types, Wise (formerly TransferWise) stands out across the Pond.

The $11 billion money movement firm has debuted on the London Stock Exchange this week with a direct listing — which, according to Reuters, means shares are sold without a public offering, and no new shares are issued.

But mechanics aside, the company’s listing is only the latest in a parade of FinTechs and payments firms that have found it an opportune time to come to market amid the great digital shift that is redefining how we move, and expect to move, funds.

At a high level, the firm is competing with companies such as Western Union, MoneyGram and other firms that also focus on moving funds across borders and currencies, but where there is still a sizable presence of cash-in and cash-out activities and agent networks.

Though the updated annual accounts for the latest financial year have yet to be published and filed with London’s financial authorities, the Wise June document declaring the intent to list gives a glimpse into Wise’s progress and operating metrics.

Double Digit Top Line Growth  

The company said that it has seen a 54 percent compound annual growth rate through the past three years, having reached 421 million pounds in revenue in fiscal year 2021.  The company also said that it has 10 million users globally, sending five billion pounds across borders each month.  Through the whole year the company moved 54.4 billion pounds across borders for six million customers active in that year, and where the volume growth, compounded between the fiscal years through 2019 to 2021, stood at 42 percent.

Adjusted EBITDA, a rough measure of cash flow, was 109 million pounds in the latest fiscal year – and pre-tax profit for the year was more than double from the previous year to 41 million pounds.

Looking ahead, according to the document, “while the impact of the COVID-19 pandemic will remain difficult to predict,” management said that the firm expects revenue to grow in the medium-term at a CAGR of over 20 percent.

That activity comes against a backdrop where almost 98 percent of international payments are flowing through banks and a range of other providers, where, per the company document, “fees are always hidden.”

And in terms of scale, the company said it has 62 licenses, enabling operations across 40 countries – and expanded presence through the past two years including the UAE, Malaysia and Brazil.

Customers, the form said, hold money across 56 currencies, and hold more than 3.7 billion in the Wise account, with about 1.6 million debit cards issued.

Earlier financial documents show that API partnerships with firms such as Xero can enable instant currency transfers; digital efforts keep the cost of money transfers at just tens of basis points, where the industry-wide cost of cross-border money remittances can stand at more than 6.7 percent of the transfer’s total value.