Wise plc: history, ownership, mission, how it works & makes money

A Brief History of Wise plc

Wise plc, originally known as TransferWise, was founded in January 2011 by Taavet Hinrikus and Kristo Käärmann. The company's mission was to provide low-cost international money transfers, challenging traditional banks' high fees.

By the end of 2013, Wise had processed over £1 billion in transfers. The company gained significant traction, successfully raising a total of **£3 million** in seed funding from investors such as Richard Branson and others. In November 2014, Wise secured an additional **£15 million** in a Series A funding round, valuing the company at around **£100 million**.

Wise’s growth continued, with the company reporting that by 2016, over **2 million** customers were using their services, leading to revenue exceeding **£18 million** that year. The company expanded rapidly across Europe, launching its services in more than **50 countries**.

In 2017, Wise raised **£30 million** in a funding round led by Andreessen Horowitz, bringing its total valuation to approximately **$1.1 billion**, securing its status as a unicorn. By 2018, Wise had processed over **£4 billion** in transfers, highlighting its increasing acceptance among consumers and businesses.

In July 2021, Wise went public on the London Stock Exchange under the ticker symbol WISE. The company’s IPO priced shares at **£8** each, giving it a market valuation of **£7.5 billion** at debut. The stock opening was considered a significant milestone for the fintech sector.

As of March 2023, Wise reported a year-on-year increase in revenue of **$200 million** for the fiscal year ending in March 2022, reflecting a revenue growth rate of **33%**. The company reported operating profits of **£12 million**. Additionally, Wise had over **10 million** active customers globally.

In the realm of financial technology, Wise plc has emerged as a formidable player, with a focus on transparency and efficiency in currency conversion. The company’s platform allows users to send money abroad at lower rates than traditional banks. Their model boasts a transparent fee structure, which averages around **0.5%**, compared to banks that may charge upwards of **3%**.

Wise continues to diversify its services, offering Wise Business accounts, which allow companies to hold and manage multiple currencies seamlessly. As of early 2023, over **150,000** businesses had signed up for Wise Business accounts, reaffirming its relevance in the global market.

A Who Owns Wise plc

Wise plc, known for its international money transfer service, has a diverse ownership structure that includes institutional investors, retail shareholders, and company founders. As of October 2023, the key shareholders and their respective ownership stakes are as follows:

As reported in the latest filings, Wise plc has approximately 400 million shares outstanding. The company went public in July 2021, and its shares are traded on the London Stock Exchange under the ticker symbol WISE. The initial valuation was around £8 billion, and recent market capitalization is fluctuating around £9 billion.

The top institutional shareholders include notable investment firms like:

• BlackRock Inc. - 10% ownership
• Vanguard Group - 8% ownership
• Fidelity Investments - 5% ownership

These firms together hold a significant portion of the company's equity, reflecting the company's promising growth trajectory and potential in the fintech sector.

Wise plc's board of directors includes various members with substantial experience in finance and technology, which bolsters investor confidence. The board also oversees strategic decisions that impact ownership structure and corporate governance.

In recent earnings reports from Q2 2023, Wise plc reported a revenue of approximately £340 million, demonstrating a year-over-year growth of 30%. The net profit for the same quarter was around £45 million, indicating strong financial health and operational efficiency.

The investor base is also characterized by a growing interest from retail investors, particularly since the increase in digital financial services accelerated during the pandemic. The rise of platforms like Wise plc has attracted attention due to their competitive pricing and transparency in fees.

Wise plc Mission Statement

Wise plc, a leading global provider of international money transfers, has a clear mission statement that emphasizes transparency, fairness, and efficiency. The company's goal is to make international money transfers as easy, cheap, and fast as sending money domestically.

As of September 2023, Wise operates in over 70 countries, supporting over 1,000 currency routes. The focus is on providing users with real exchange rates and low fees. In the financial year ending March 2023, Wise processed over £100 billion in transactions.

The mission statement encapsulates Wise's core values:

• Trust: Ensuring consumer trust through transparency and fairness.
• Accessibility: Providing services that are easy to use for everyone.
• Low costs: Maintaining low fees compared to traditional banks.
• Speed: Delivering swift transactions to enhance user experience.

Wise's commitment to transparency is underscored by its operational metrics. In the financial year 2023, Wise reported:

In terms of user growth, Wise added over 2 million new customers in the past year alone, highlighting the growing demand for more affordable and efficient global payment solutions. The company also boasts a customer satisfaction rate of over 90%, reflecting its commitment to user experience.

By staying true to its mission, Wise aims to reshape the international money transfer landscape, making financial services more inclusive and accessible. The innovative use of technology enables Wise to minimize operational costs, which translates into savings for users.

Furthermore, Wise operates on a unique business model that is centered around its transaction fees and currency conversion, which allows it to maintain competitive pricing. The financial results from the first half of the fiscal year 2024 indicate a revenue growth of 30% year-on-year, illustrating the effectiveness of its mission-driven approach.

How Wise plc Works

Wise plc, formerly known as TransferWise, is a financial technology company that specializes in international money transfers. The company's business model hinges on providing a cost-effective and transparent service to consumers and businesses looking to send money abroad. This is achieved through a peer-to-peer system that cuts out traditional banks and their associated fees.

Wise operates by matching users who want to send money in different currencies. Instead of moving funds across borders, Wise takes advantage of local bank accounts to facilitate transactions, thereby minimizing costs and time taken. This method allows Wise to offer exchange rates that are closer to the mid-market rate, often resulting in lower fees. As of October 2023, Wise charges an average fee of 0.6% of the transaction amount, significantly lower than most banks.

In the fiscal year 2023, Wise reported significant growth in its user base and transaction volumes. The number of active customers reached approximately 17 million, up from 10 million in 2022. The company processed around £97 billion in transactions, showcasing a year-over-year increase of 29%.

Wise generates revenue primarily through transaction fees and currency exchange spreads. In its latest earnings report, the company revealed a revenue of £501 million for the fiscal year 2023, representing a growth of 32% compared to the previous year. Profit before tax stood at £65 million, indicating a profit margin of approximately 13%.

Wise's technology platform plays a central role in its operations. The company uses advanced algorithms and machine learning to optimize exchange rates and ensure smooth transactions. The platform is designed to handle millions of transactions concurrently, providing high reliability and quick processing times. The average transaction time is currently under 30 seconds, a significant improvement from traditional banking methods.

Additionally, Wise has expanded its offerings with features like multi-currency accounts, allowing users to hold and convert more than 50 currencies at competitive rates. This service is particularly popular among frequent travelers and international businesses. As of October 2023, Wise had approximately 2.5 million multi-currency accounts, marking a substantial increase from the previous year.

Internationally, Wise continues to expand its footprint, currently available in over 80 countries. The company complies with regulatory standards globally, ensuring that its operations meet local legal requirements. Wise's regulatory framework includes partnerships with local banks and financial institutions which facilitates its operating model.

Competition in the international money transfer market is intense, with competitors like PayPal, Revolut, and traditional banking institutions. However, Wise distinguishes itself with its commitment to transparency and lower fees. The company's unique value proposition has garnered a loyal customer base, evidenced by a net promoter score (NPS) of 85, suggesting high customer satisfaction.

Wise's ongoing innovations and commitment to transparency suggest a strong outlook for future growth. The company plans to invest in enhancing its platform technology and expanding its product suite to further increase market share and customer engagement. With an eye on scalability and efficiency, Wise remains poised to adapt to the evolving needs of its users in the global financial landscape.

How Wise plc Makes Money

Wise plc generates revenue primarily through its multi-currency account services and international money transfers. The company operates on a transparent fee structure that varies based on the transaction type and currency.

In the financial year ending March 2023, Wise reported a total revenue of £482 million, representing an increase of 32% year-over-year. The growth is largely driven by an increase in active customers and transaction volumes.

The company's revenue streams can be segmented as follows:

• International Money Transfers
• Multi-Currency Account Fees
• Business Accounts and Fees

Wise charges a fee for transferring money abroad, which typically ranges from 0.35% to 2% of the transaction amount, depending on the currency pair. The average transfer fee as of Q2 2023 was approximately 0.7%.

As of June 2023, Wise had over 13 million customers, an increase of 23% compared to the previous year. This growth in customer base has translated into a significant increase in transaction volume, which reached £94 billion in FY 2023, representing a 30% increase year-over-year.

Wise’s operating expenses for FY 2023 were £350 million, leading to an operating profit of £132 million. The profit margin for the year was approximately 27%. The bulk of operating expenses stemmed from technology development and customer acquisition costs.

Furthermore, Wise has initiated partnerships with various banks and financial institutions, enhancing its reach and enabling more competitive pricing strategies. This approach is expected to contribute to future revenue growth as it expands its service offerings globally.

Wise's strategy includes continuous investment in technology to facilitate faster money transfers and enhance customer experience, which has proven crucial in retaining and attracting customers in a highly competitive fintech environment.