Transferwise hits $3.5 billion valuation and plots US expansion, IPO

One of the largest fintechs in Europe has boosted its valuation following a secondary funding round from investors including BlackRock.

“We will be further expanding in the US sooner rather than later,” CFO Matt Briers told Business Insider.

Now valued at $3.5 billion, the London-based fintech maintains its intention to one day go public.

While an IPO is on the cards, “private markets are both strong and liquid for companies like us,” he said.

Transferwise today announced it had secured secondary funding worth $292 million, making it the fifth most valuable unicorn on the continent.

CFO Matt Briers outlined his strategy in an interview just before the announcement. The company on Wednesday said American growth funds Lead Edge Capital, Lone Pine Capital and Vitruvian Partners led its fundraise while investors Baillie Gifford and Andreessen Horowitz boosted their holdings.

“We will be further expanding in the US sooner rather than later,” Briers said in the interview. The fintech, founded in 2011, is now valued at $3.5 billion. BlackRock managed funds also piled into the fundraising.

“Our borderless account has been popular in the UK and the opportunity for customers in the US to send and receive payments in different currencies with a debit card will be launching this year.”

Part of the expansion will include the hiring of some 750 staff in the next 12 months, adding to an existing 1600 global workforce. The company also plans to boost its presence in the Asia Pacific region.

The secondary funding is uncommon in Europe and these deals, where existing shareholders sell off their shares, are not generally publicized. Transferwise has now raised $689 million in primary and secondary funding.

It's another important step for one of Europe's hottest fintechs as the company bids to scale its payments business globally. The US already makes up a sizeable portion of the company's revenues but the expansion of the company's borderless account which could include a debit card has been slated for launch later this year.

The company allows customers to send and receive funds in multiple currencies all at real time exchange rates. The model disrupted the FX operations of Europe's largest banks upon its launch with the aim of reducing fees on transfers.

Those who sold shares include its early investors. Cofounders Taavet Hinrikus and Kristo Käärmann have also reportedly sold a small part of their stakes.

Read more: TransferWise was just valued at $3.5 billion in a Silicon Valley-style deal that shows why Europe's tech scene is maturing fast

Investors view the company as ripe for a float, and it now has the freedom to choose when it goes public. Some companies can feel pressure to list or sell if their backers want liquidity. Hinrikus told the Financial Times that he believes TransferWise will go public at some point, but the deal means there's no rush.

“We could go public tomorrow,” Briers told Business Insider. “We're likely to go public at some point in the future but in the short to medium term, this deal shows that private markets are both strong and liquid for companies like us.”

Given the recent poor performance of other recent tech IPOs, Uber and Lyft spring to mind, it's no surprise that Transferwise wants to keep its powder dry for now. Notably, the company is profitable, meaning it's not reliant on external funding, a bygone in the current market.

Despite the raise the company notes it's still in the “early morning” of it's growth plans but this move shows a greater maturity of both Transferwise, and notably its investor pool.