The London-based startup with Estonia's Skype roots, Transferwise, announces it has raised $25 million from Peter Thiel’s Valar Ventures, Index Ventures, Sir Richard Branson and other investors. The company hints it will be using the funding to expand consumer awareness of their product, which allows consumers and businesses to exchange and send money cross border using much cheaper exchange rates than what banks offer. Since launching, Transferwise has raised $33 million.
Your typical bank will either hide fees in a poor exchange rate, or will tack on fees for sending money cross border. Transferwise instead matches money being sent both ways, allowing you to get a rate much closer to the spot rate.
To date, the company has trasfered over £1 billion in customer's money, saving an estimated £45 million in banking fees. Transferwise already has over 100 employees with 234 currency routes. The firm is said to be growing 20-30% every month.
On the investment, Sir Richard Branson either said the following, or OKed this statement written by a PR agency:
“I’m delighted to be investing in such an innovative company as TransferWise. Financial services such as foreign exchange have been ripe for disruption for decades and it’s great to see TransferWise bring transparency to the market. It’s encouraging to see entrepreneurs using technology to reinvent the old-fashioned FX industry and make a real difference in the market. I see tremendous opportunity for startups like Transferwise to offer breakthrough financial services and products.”
Transferwise's solid growth is testament to how much myself and others have been looking for a better solution for sending money home. Despite that, they're seeing some light competition from competitors like Lithuania's Transfergo, and banks might get their act together to drop fees. In the past there was really no better alternatives to moving money than using your bank, but as more and more people realize there are alternatives, I imagine it's going to be a race to the bottom for these companies.
Still, Transferwise is the first money transfer company to come to many people's mind, and they're doing well with their populist "fuck banks" advertising that will get them fairly far. What's next for Transferwise's Series B? More funding? Or an IPO or Acquisition?