British Fintech company Wise (Formally TransferWise) confirmed this week that it plans to go public by listing on the London Stock Exchange (LSE) in early July. The company announced that it chose direct listing instead of having an initial public offering since it’s not on a mission to acquire fresh capital. This happens when the company’s most reliable pool of investors has started exploring other options. As a result, it will be the first direct listing of a London tech company.
The company, based in London, basically facilitates the transfer of money across different countries and in different currencies. It boasts of having over 10 million users and projects immense growth in the next few years. It is not yet clear what the pricing of Wise’s class A shares will be. However, some reliable sources in the UK have reported that the company’s valuation could range between $6B and $7B after the listing.
Wise will have a dual-class structure for its shares – class A and class B shares. Note, however, that you will not be in a position to trade class B shares. The structure will leave Kaarman, the co-founder and CEO of Wise, with more voting rights than other investors. However, no shareholder will remain with more than 50% of voting rights by owning class B shares.
The company plans to introduce OwnWise, a custom shareholder scheme that would allow users to own stakes in the company. Customers who participate in this scheme will receive bonus shares worth up to a max of £100 after a year. Besides, they will receive other benefits, e.g., invitations to attend biannual mission days.
The rapid growth of Wise
Wise, founded in 2010 by Estonians Taavet Hinrikus and Kristo Käärmann, has one of the most inspiring European stories. The company’s management has been forced to strategize from time to time to survive through hard times such as Brexit’s financial turmoil. This explains why it has a large user base that transacts around $7 billion across borders each month. The Fintech giant, which has been making profits since 2017, recorded a growth in revenue from $422M to $586M in the latest financial year.
Kristo Käärmann, the CEO of Wise, said, “This process will broaden the ownership of Wise, in support of our mission to move money around the world faster, cheaper, and more conveniently.”
This news marks a significant win for Britain, which has in the past struggled to convince large tech companies to list in the LSE rather than New York Stock Exchange (NYSE). The government has been considering relaxing LSE rules to make it easier to issue dual-class shares – these shares give early bankers and founders more control over the company.