TransferWise eyes further partnerships as valuation hits $US5 billion

  • By Christine St Anne

TransferWise will look at forging partnerships in the Australian market including the banks and the New payments Platform as its valuation hits the $5 billion mark. 

On Wednesday, the cross-border payments fintech announced that it is now valued at nearly $7 billion ($US$5 billion following a secondary share sale valued at $445 million ($US319 million)

This round paved the way for its shareholders and employees to sell some of their holdings to existing as well as new investors. 

The round was led by existing investors Lone Pine Capital and new investors D1 Capital Partners. Vulcan Capital also came on board as a new investor. Baillie Gifford, Fidelity Investments and LocalGlobe expanded their existing holdings. 

TransferWise country manager, the Melbourne-based Tim Cameron acknowledged that the investor support reflected the global firm’s ability to remain resilient in the current challenge market particularly with its offering in global online payments.

However, he said investors also recognsied that TransferWise has consistently been able to executive and grow [and be profitable] as it services more of its customers around the world.

Founded in January 2011, TransferWise now has 8 million customers globally processing $7 billion in cross-border payments alone every month. 

Closer to home, partnerships will be key to the growth of the business. It has already set up a partnership with Up digital bank - Nine banks across three continents, including neobanks Monzo, N26 and bunq, now offer TransferWise’s service to their millions of customers through the TransferWise for Banks API.

Would love to work with banks

Cameron said the focus in Australia for the business key and “would love to work with more banks in Australia. We have a number of initiatives in the pipeline in Asia and he is eyeing similar opportunities in Australia”. 

And while the current partnerships are with neobanks – potentially Cameron sees scope for the major banks to embed the TransferWise offering into the app as consumers become increasingly aware of the high cost of making cross-border payments – a particular bugbear of the Reserve Bank’s governor Philip Lowe. 

On the SME front, TransferWise is also garnering customers. 

The TransferWise for Business platform has expanded recently – the initiative has also seen the launch of partnerships with Xero And GoCardless.

“We now on-board 10,000 businesses a month globally. Functionally we have been building up that platform to make it better.

“What that means is that larger businesses are starting to be able to use transfers as well the extra account administration functionality.”

The NPP could also open up more opportunities for TansferWise to deliver on instant cross-border payments, however at this stage only banks are allowed to participate.

The Reserve Bank has made recommendations for access to open up. The Bank of International Settlements has also urged greater access to global payments systems in a bid to reduce the cost of remittances through recommendations in a report that will be tabled at a G20 meeting.  

“We would like to be direct participants in the NPP. We are already directly connected to the equivalent payment systems in the United Kingdom and Europe. We have some ongoing work in the background with other countries.” 

Whether TransferWise will look at getting an approved deposit licence, ADI, Cameron added that this always something the business is thinking about but added that the Council of Financial Regulators is already looking at the area of future payments licensing. 

The $US5 billion valuation now makes TransferWise a highly valued private company. The perennial question is of course whether the global fintech will look at an IPO. 

“The secondary share sale has pushed out the need for an IPO. The fact is that we have investors knocking on our door looking to invest.  Possibly in the future we could go to an IPO, but not any time soon.”