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Wise has made a direct listing on the stock exchange in London
Wise held an initial public offering on the London Stock Exchange, the first direct listing for the European IT market. The UK-based payment service was valued at $11 billion, making its founders billionaires. That amount is more than double Wise’s capitalization after another round of funding last year. The initial share price at the start of trading was about $11 per paper.
The company’s shareholders gave investors about 2.4 percent of the securities to buy. In the listing process, Wise moved away from a traditional initial public offering, which is an extremely expensive process. In addition, this option allowed reducing the risks of speculation, which often accompany the valuation of this or that company.
It should be noted that Wise – not the first in Europe, which decided to go to the stock exchange through a direct listing mechanism. This variant of IPO assumes that the cost of securities depends primarily on the demand and trends in the markets, and is laid down in advance. Previously, a similar offering was used by the Swedish streaming service Spotify. A year later, in a similar way announced itself the company Slack Technologies, which owns the messenger of the same name. In 2020, Palantir Technologies, which develops software for the analysis of data arrays, announced itself on the New York Stock Exchange through a direct listing mechanism. It was followed by Asana, which also provides software. This option of going public is gaining more and more popularity, as evidenced by the placement of shares of the cryptocurrency exchange Coinbase Global and the game platform Roblox.
Wise was founded in 2010 by two Estonians, one of whom worked for Skype and the other for Deloitte. After a public offering, they became the first Estonian-born dollar billionaires. The payment service’s income depends on a commission on financial transfers. The platform works with 55 currencies and allows transactions in 80 countries. And Wise’s commission is lower than that offered by retail banks.
The company showed its first profit in 2017, and in 2021 it doubled this figure to almost $43 million. Revenue was up 39%. Fintech Service is a promising development whose investors include Richard Branson, the co-founders of PayPal, as well as well-known investor Bailey Gifford.
Wise’s main competitor in the fintech market is Revolut, which is valued at $5.5 billion. It is followed by startup OakNorth, which has a capitalization of $2.8 billion.