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Wise has made a strong debut on the stock exchange, giving the international payments firm a valuation of over £ 8 billion, making it the largest ever listing for a UK tech company and boosting London’s hopes of ‘attract more tech companies looking to float.
Wise, the Shoreditch-based fintech company formerly known as TransferWise has chosen London for a rare direct listing, a form of IPO where a company begins publicly trading but does not issue new shares.
The company, which aims to revolutionize cross-border payments by removing markups that banks and forex traders add to transactions, began trading publicly at 800p in London on Wednesday, giving it a valuation of £ 8 billion.
Within hours, traders sent the stock price of the company, one of Britain’s best-known fintech unicorns, higher by more than 3% to almost 830p. Wise also said that a separate incentive plan for its own clients had been oversubscribed and that the 125,000 applicants would be reduced to 100,000 by lottery.
In the company’s last fundraising round in July last year, investors valued the company at £ 5 billion.
The market response will be a boost for London, which has struggled to attract listings from fast-growing tech companies that have preferred US markets. In March, the capital’s reputation was tarnished by the disastrous launch of take-out restaurant company Deliveroo, which fell by more than a quarter in its early days, leading market watchers to call it ‘Flopperoo’.
“Wise may have stolen blindfolded the stock market since by choosing a direct quote, its stock price was not decided in advance,” said Susannah Streeter, senior investment analyst and markets at Hargreaves Lansdown. “But the payments company had a soft landing with its share price rising. The smooth start to trading should help London’s efforts to maintain its reputation as a fintech hub. “
Wise was founded in 2011 by Estonians Kristo Käärmann and Taavet Hinrikus, who are now paper billionaires, in 2011. Prior to being listed, Kaarman held an economic stake of 18.8% in Wise and 10.9% in Hinrikus, valued at £ 1.5 billion and £ 872 million, respectively.
Existing shareholders were to sell 24.2 million shares, or 2.4% of the company, in a three-hour private auction process before the company went public.
The company now has 10 million customers and has been profitable for four years. Pre-tax profits doubled to £ 41million in 2020 as it increased its share of the £ 54 billion that was transferred across borders last year.
The IPO is also expected to benefit Wise’s 2,000 employees, who own around 10% of the company.
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