FinTech: U.K. Fintech Wise Announces Plans for A Direct Listing on the London Stock Exchange

June 17, 2021 | FinTech, News

This is the first time a tech company is going public via a direct listing in London.

Wise, previously known as TransferWise, announced Thursday its decision to go public via a direct listing on the London Stock Exchange. The company justified a direct listing in favour of an IPO on grounds that it is “a fairer, cheaper and more transparent way for Wise to broaden its ownership, in support of its mission to move money around the world faster, cheaper and more conveniently.” It confirmed that it no longer needs to raise primary capital. (Wise)

Wise: direct listing

“The direct listing is possible due to the company’s sustainable approach to growth,” the company said in the announcement. “Wise has been profitable since 2017, with a 54% revenue CAGR over the last 3 years reaching £421 million of revenue in FY2021.”

Profit before tax for FY2021 more than doubled to £41 million compared to the prior year. Revenue is expected to grow in the medium-term at a CAGR of over 20% and Adjusted EBITDA margin to remain above 20%.

The fintech was previously valued at $5 billion in a secondary share sale completed in July 2020.

“We chose a direct listing because everyone has the same opportunity to own a part of Wise, from large institutions to customers,” Kristo Kaarmann, CEO and co-founder of Wise, said on a conference call. “It’s less expensive than an IPO which helps us keep costs down and ultimately helps us on our mission to lower prices.”

The direct listing route will allow Wise to go public without appointing underwriters, issuing new shares or having to price them. However, for the direct listing, the pricing of the shares would be determined by the market, though a Sky News report said the company is targeting a valuation of up to £9 billion, according to CNBC.

OwnWise: Customer shareholder program

The company announced a customer shareholder program titled OwnWise, open for pre-applications from UK eligible customers from Thursday.

Customers participating in OwnWise who buy shares and hold them for 12 months would be eligible for benefits such as bonus shares, the chance to win a trip to the company’s Mission Days company conference, limited edition Wise swag, and the option to join the OwnWise community.

Wise: Dual structure

Wise intends to issue two classes of shares, class A and class B. However, the class B shares would entitle holders to nine extra votes per share that are non-tradable, unlisted, and will expire on the fifth anniversary of the company’s listing.

As a result of this, founders Kaarmann and Taavet Hinrikus would be entitled to disproportionately higher voting rights compared to other investors, allowing them to retain voting control.

“We are here for a long term mission,” said Kaarmann to Reuters. “For the transition period of five years we are setting up this structure so we can focus on this mission.”

Related Story: U.K.’s Wise To Challenge Indian Banks’ Strangle On Foreign Remittances                                                 

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
FinTech: India’s PayTM Gets Heat From Proxy Advisory Firm
August 12, 2022     FinTech, News

Proxy advisory firm Institutional Investor Advisory Services India Ltd. (IiAS) has issued a note ahead of PayTM’s (NSE: PAYTM) annual shareholders’ meeting on August 19 calling for the replacement of…
Venture Capital: Lockheed’s Venture Arm To Boost Investment In Space Startups
August 12, 2022     News, Venture Capital

Lockheed Martin (NYSE: LMT) and its venture finance arm Lockheed Martin Ventures plans to boost the latter’s investment outlay from $200 million to $400 million.
Digital Assets: Brazilian Fintech PicPay Launches Crypto Exchange With Paxos

PicPay, the well-known Brazilian payment app, has got its shoe in the crypto door in partnership with Paxos, a leading regulated blockchain infrastructure company. Picpay is opening crypto trading services…
FinTech: Telecom Behemoth BT Adds Barclaycard Payments To Partnership Network For Micro-Businesses
August 12, 2022     FinTech, News

BT (LON: BT.A), the telecom major, announced that Barclaycard Payments had joined its partnership network seeking to help the growth of UK microbusinesses. BT customers with 0-5 employees would get…