FinTech giant Wise to press button on long-awaited listing | Economic news

FinTech giant Wise hopes to push the button within days of a long-awaited IPO that will cement its status as one of Britain’s most valuable start-ups of the past decade.

Sky News has learned that Wise has made plans to launch a direct listing on the London Stock Exchange as early as this week.

Sources in the city said the exact timing depended on final approvals from regulators, which meant that an announcement could still be postponed until later in the month.

Wise’s public market debut will be a historic moment for the payments app, which now has more than 10 million customers and transfers £ 5 billion on their behalf every month.

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There has been an increase in demand for listings in London this year

Insiders expect the company’s IPO to value it as much as £ 9bn – well above previous estimates – although the volatility that has plagued recent quotes from London tech companies means that Wise’s advisors can take a conservative approach to its initial assessment.

They added that a valuation well above £ 5bn was “almost certain”.

Sky News revealed earlier this year that Wise plans to register without raising new capital from investors – a process known as an introductory or direct registration.

It also plans to roll out a dual-class share structure that will allow its founders and early investors to retain control of the votes – a proposal that could replicate the controversy encountered during Deliveroo’s IPO in the spring.

At Wise, such a move would not only keep voting control in the hands of Kristo Kaarmann, co-founder and CEO of Wise.

Early investors such as Sir Richard Branson, Baillie Gifford and Andreessen Horowitz, one of Silicon Valley’s leading investment firms, would also see their holdings converted into the new share class.

Wise has grown into an international payments giant, offering transfers in 56 currencies and now employing nearly 2,500 people.

Its decision to go public in London – despite pushing some of its new investors to float in New York – will delight British politicians during a period of intense debate over London’s attractiveness as a listing destination for technology companies.

A government-commissioned study released earlier this year by Lord Hill, the former EU commissioner, recommended reforms to liberalize governance structures to attract more foreign companies to the UK.

It also aims to prevent UK ‘unicorns’ – businesses worth at least $ 1 billion – from listing overseas, an ambition that has been undermined by the wave of corporate firms. US-based specialist acquisition (SPAC) that attract companies such as Cazoo and Vertical Aerospace. in the US markets.

Deliveroo and Alphawave have seen their stocks struggle since their IPO, while cybersecurity firm Darktrace has scaled back its valuation ambitions in order to remove its float.

Stock photo of Deliveroo runners protesting violent attacks against them during a demonstration.  Photo date: Wednesday, September 2, 2020.
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Deliveroo’s IPO is among many struggles in London this year

If Wise continues with the dual class structure, it would not be eligible for the premium listing segment of the London market or for inclusion in major indices as long as it remains in place.

A direct listing, or an IPO as it is often referred to in the London market, remains relatively rare for capital-hungry tech companies that regularly use IPOs as a way to bolster their balance sheets.

Wise is working with Goldman Sachs and Morgan Stanley on their IPO plans.

The company, founded by Taavet Hinrikus and Mr Kaarmann, has become one of Chancellor Rishi Sunak’s main targets for an IPO in London.

The leaders have held talks with the Prime Minister and the Chancellor over his IPO ambitions in recent months.

Wise is considered a particularly important company to be persuaded to locate in London due to its rapid international growth.

Last July, D1 Capital Partners, which has placed substantial bets on some of the world’s biggest tech companies, bought a $ 200 million stake from other TransferWise investors.

The deal came after Wise obtained a license from the Financial Conduct Authority to offer investment products, a move it says will allow clients’ cash balances to generate a more attractive return. .

However, it does not intend to become a full-fledged bank which in the UK competes with companies like Monzo, Revolut or Starling.

Taavet Hinrikus, CEO and co-founder of TransferWise
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Taavet Hinrikus

Mr. Hinrikus and Mr. Kaarmann, who were born in Estonia, started the business amid frustration over the cost of sending money overseas.

An IPO would make them paper billionaires if the estimates of the size of their stakes in TransferWise – they are thought to own around 40% of them all – are correct.

The company became a ‘unicorn’ – a tech start-up worth at least $ 1 billion – in 2015, and is more valued than other UK fintech champions such as Oaknorth, the digital bank , which has raised hundreds of millions of pounds from SoftBank. Vision Fund.

A spokeswoman for Wise, who until recently called herself TransferWise, declined to comment.

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