After months of rumours, TransferWise, the London headquartered money transfer startup and fintech darling, has confirmed that it has raised a further round of funding.
Described as ‘top-up funding’, the $26 million round was led by investment management firm Baillie Gifford, with participation from existing investors. TechCrunch understands via two sources close to the company that this values TransferWise at $1.1 billion.
That of course would make the U.K. startup a member of the so-called ‘unicorn’ club — that is, companies with a valuation of a billion dollars or more — but also brings earlier reports of its £1 billion valuation into ill repute.
When I asked co-founder and CEO Taavet Hinrikus why TransferWise didn’t stop those incorrect reports in their tracks, his reply was that the company has never commented on its valuation nor encouraged others to do so.
“I’ve never referred to our valuation as being a compliment, or flattering or important in any way,” he told me.
Regards today’s funding round — which I heard actually closed a couple of months ago, and brings total raised by TransferWise to $117 million — Hinrikus told me it will be used to improve the loss-making startup’s balance sheet as it continues to plough all revenue into future growth.
The company, whose backers also include Andreessen Horowitz, Peter Thiel’s Valar Ventures and Sir Richard Branson, now employs over 600 members of staff in offices in the U.K., Europe and the U.S., leading me to ask the TransferWise CEO what all these people actually do.
“I ask myself that everyday,” he replied jokingly, before revealing that along with marketing, finance and tech teams, the startup employs roughly 100 product people. And TranswerWise’s product has been the key to the company’s ability to create a strong brand (and a ton of PR), he says.
I also asked why today’s round is less than half the size reported by Sky News back in February, but Hinrikus refused to be drawn on any specific reports, only to say that a startup the size of TranswerWise has a number of on-going financing options, including both equity and debt. He did concede, however, that the fundraising climate had changed in the last year — cooling down notably — but that he thinks this is “a good thing”.
Finally I asked him about reports that TransferWise had been caught in the crossfire regarding its U.S. operations and in particular its banking partner who has come under regulatory scrutiny. He said he’s 100 per cent confident TransferWise is compliant in the U.S. and that the company is closer to having its own banking license stateside. “We prefer to be in charge of our own destiny,” he says.
Interestingly, a money transfer license is required for each of the 50 states in America, which really puts the EU referendum debate in context for U.K.-based TransferWise. Hinrikus is a known supporter of the U.K. staying in the European Union, with its 500 million population acting as a single market. “It’s the best thing since sliced bread,” he tells me.