Transferwise scales up in London
Being headquartered in London has helped the company to grow a significant customer base. London’s population is formed of more than 270 different nationalities, making it the most cosmopolitan and global city in Europe.
Käärmann explains how London’s diversity has helped his startup flourish and achieve vital scale: “Our success in the UK has shown that it really helps to be close to the customer.
“I think that’s one of the things that many internet businesses are starting to realise. Although theoretically it can all be done online, you have to really know your customer.”
Four years since launching in London, Transferwise continues to grow steadily at a rate of 16-20 per cent a month, according to Käärmann. Additionally, more than £3bn has been transferred through the platform.
Although theoretically business can all be done online, you have to really know your customer.
Kristo Käärmann, Transferwise
London’s $1bn companies
Transferwise’s success in London and further afield has made the company one of the city’s first $1bn technology companies.
At the start of 2015, the international money transfer business was valued at $1bn by top Silicon Valley venture capital fund Andreessen Horowitz, making it London’s second $1bn tech company.
This latest investment round in Transferwise, worth $58m, brings the total amount invested in the company to just shy of $100m. Other investors include Sir Richard Branson and PayPal co-founder Peter Thiel.
In total, VCs have invested more than $6bn in tech companies since 2010, and the rate of VC money flowing into the capital is growing rapidly.
From its London base, Transferwise is now in strong position to expand overseas, with Käärmann saying the company will open two US offices, as well as having plans for sites in Germany and Australia.
“From London, we can fly to San Francisco or Hong Kong in 12 hours,” says Transferwise co-founder Hinrikus. “We can go anywhere.”
Transferwise is a peer-to-peer service that lets people transfer money internationally at a low rate over its online platform.
The company, based in Shoreditch, east London, was founded by Estonians Taavet Hinrikus, a former director at Skype, and Kristo Käärmann, a business consultant, in 2011 to offer an international transfer service without any “hidden” banking fees.
Key takeaway: London for investment
|For Transferwise, London provided an ideal environment for investment:|
|International money transfer business Transferwise was founded in 2011 by Estonian entrepreneurs Taavet Hinrikus, a former director at Skype, and Kristo Käärmann, a business consultant|
|Transferwise chose London as its base due to its unrivalled global connectivity, its tech-savvy customer base and the strong VC appetite for tech firms|
|The company has reaped the rewards of being headquartered in London. The company continues to grow at a rate of 20 per cent per month, and more than £3bn has been transferred through the platform|