You are here
Remittance startup TransferWise raises US$280m in latest fund raising
ONLINE remittance startup TransferWise has raised US$280 million for growth, with Asia as a key focus, said its chief executive on Thursday.
The London-based financial technology firm, which is valued at more than US$1 billion, made Singapore its Asia-Pacific base earlier this year and has plans to roll out new products and services across the region from Singapore, said TransferWise co-founder and chief executive Kristo Käärmann.
Plans include launching a "borderless" account which will allow companies to transact overseas in the local currency.
The company's latest funding round was led by asset management giant Old Mutual Global Investors and IVP, a Silicon Valley venture capital firm.
Silicon Valley's Sapphire Ventures, Japanese company Mitsui & Co, and US-Japan venture firm World Innovation Lab also joined as new investors.
The round was supported by existing investors Richard Branson, Andreessen Horowitz and Baillie Gifford who all re-invested. The company has raised US$397 million to date.
Mr Käärmann said that the investment round "reflects the opportunity that investors see, in services that used to be run by banks but have been taken over by tech companies who are able to do the same things cheaper and more pleasantly".
Asia is key to the company's growth, he noted. TransferWise launched in Singapore in July last year and set up an office here in September to support its expansion across the region. The company has 25 staff here, and plans to grow to 50 strong by the end of this year.
It has a large global licensing footprint, which means that customers in Singapore can send money to 67 countries and receive transfers from 42 countries. It charges a fixed fee plus a percentage for each transfer. This averages out to around 0.5 per cent across all currency routes with a minimum fee of S$2.
The company is already moving S$700 million on an annual basis in and out of Singapore, said Mr Käärmann. Users range from students studying overseas to pensioners who have retired abroad.
While this is still a small share of its global business - TransferWise moves more than US$1 billion around the world every month - "it is really fast growth", he added. "Our work is just starting. Most of the volume is still with banks, so there are still huge opportunities for growth."
The company is also planning to roll out a "borderless" account for companies in Singapore in the next month, which "works like a local account in any country", Mr Käärmann said.
The service, already available to TransferWise's customers in Europe, will provide companies with local account details, allowing them to transact in the local currency and avoid additional cross-border charges typically imposed by banks.
"A company owner needs just 40 seconds to open bank accounts all over the world," said Mr Käärmann. "Even individuals, like freelancers who work around the world, find it useful," he added.