Fintech firm Wise, formally TransferWise, made its record-breaking stock market debut this week, becoming the largest ever UK tech listing with a valuation of 8.75bn. The international payments company chose the London Stock Exchange for a direct listing, a rare form of flotation where a company begins trading publicly without issuing new equity.
Wise began trading at 800p in London on Wednesday and finished the day at 880p. The company had been valued at £3.5bn by investors at its last funding round in July 2020, less than half that the company opened with this week.
Wise’s listing on the LSE is a huge boost for London, which has often lost out to big fintech listings. Such companies have typically preferred the US markets. London’s reputation took a hit back in March when food delivery firm Deliveroo fell by more than a quarter on its debut. The disastrous flotation saw market watchers term it “Flopperoo”.
Commenting on the listing, Hargreaves Lansdown analyst Susannah Streeter said that “Wise may have flown into the stock market blindfolded given that by choosing a direct listing its share price wasn’t decided in advance.”
“But the payments firm has had a smooth landing with its share price rising. The unruffled start to trading should help London’s efforts to maintain its reputation as a fintech hub.”
According to the LSE, Wise’s market capitalisation makes it the most valuable tech company to join the capital’s market. Direct listings have recently proved popular with US tech firms, with Spotify, Coinbase and Roblox all going public in this way. Executives are optimistic that Wise will pave the way in London.
The company, founded by Estonian businessmen Kristo Kaarman and Taavet Hinrikus, aims to revolutionise cross-border payments by removing the markups and foreign exchange dealers and banks add to transactions.
The company now has over 10 million customers around the world. It has been profitable since 2017, with pre-tax profits doubling last year to £41m in the 12 months up to March 31. Wise’s founders became billionaires upon the listing and it’s also expected to benefit the company’s more than 2,000 employees, who own 10% of it.
Kaarmann told staff on Wednesday that the “listing is incredibly exciting”, and reminded them that it’s “important to remember that we’re still very early on in our journey.”