UK Fintech Wise Plans Direct Listing on LSE

Wise, previously known as Transferwise, confirmed on Thursday about its plans of going public with a direct listing on the London Stock Exchange.

Unlike traditional initial public offering (IPO), the direct listing will now allow the British fintech company to raise fresh funds from the capital market. The company will simply float its existing shares on the public exchange, and the market will decide the price.

“We chose a direct listing because everyone has the same opportunity to own a part of Wise from large institutions to customers. It’s less expensive than an IPO which helps us keep costs down and ultimately helps us on our mission to lower prices,” said Wise co-founder and CEO, Kristo Kaarmann.

Business Is Booming

Wise was founded in 2010 as a fintech for cross-border payments in an efficient way and with less fees compared to banks. The recently rebranded company claims to have 10 million customers globally and handles $7 billion in transactions every month.

The company is also generating profits since 2017, with around 54 percent annual revenue growth rate in the past three years.

Kaarmann stressed that a public listing at this stage of the company will make the business ‘transparent and fair’.

Wise has already hired Goldman Sachs, Morgan Stanley, and Barclays as lead financial advisors for the listing, while Citigroup is a co-advisor.

The company is aiming to float at least 25 percent of its shares, and the listing is expected to be finalized by July 5.

Interestingly, Wise will be following a dual-class structure of shares that gives co-founders and early investors more control over the company. The firm intends to issue Class A and Class B shares: the latter will be non-tradable and have nine extra votes per share.

Though such structures of tech company shares are common in the United States, several United Kingdom investors criticize the dual-class structure. Earlier this year, Delivaroo went public in London with a dual-class structure. The company shares are now trading at a 30 percent discount from the listing price.