International money transfer service TransferWise Thursday announced $280 million in capital raised from Old Mutual Global Investors and venture capital firm IVP, bringing their total investment to date to $397 million and giving them a reportedly $1.6 billion market valuation.
The investment will be used as fuel for their continued expansion into Asia. TransferWise launched their services in China last year and opened a hub in Singapore in April. TransferWise expects the full range of services to be up and operating in India within the next year—at present, customers can only send money to the country.
Some of the funds will also support TransferWise’s recently launched borderless business account and a soon-to-launch foreign currency card.
“Business banking is notoriously expensive and difficult to set up and manage, even alternatives like PayPal are expensive for small businesses,” Taavet Hinrikus, CEO and co-founder of Transferwise told Wired. “So we’ve created the Borderless account. It’s an account that’s not constrained by country or currencies and gives businesses more freedom and control”.
The company says the borderless account, designed to reduce the cost of international banking, has no setup fees, no monthly charges or fee to receive a payment. When money is transferred across borders, TransferWise does charge a “small transparent” amount, though.
While on the surface TransferWise looks like one of the many early challenger banks coming out of the UK, the company is differentiated from its younger rivals, like challenger bank Revolut. Launched in 2011, it is TransferWise’s stated goal to be the go-to service for international money transfers, and that continues to be their focus. They claim to have over two million customers across 42 countries, to move £1 billion in transactions each month, and that they finally turned a profit for the first time in early 2017. Though, according to Bloomberg, TransferWise has yet to file “its financial statements for the tax year ended March 2017.”
But their plans certainly seem ambitious. According to Business Insider, Hinrikus, said: “£1 billion is just a slice of the market, which means millions of people are still being ripped off by banks and traditional currency brokers every day.”
Cadence is a fintech reporter and writer at Fintech Unltd, where she covers the changing landscape of financial technologies. Previously, Cadence interned at Psychology Today, Business Insider and the Wisconsin State Journal. Cadence is interested in how science and technology intersect with power and culture and is curious about the world we are creating for tomorrow, consciously or not. She graduated from the University of Wisconsin–Madison in 2017 with degrees in Journalism and Chinese. Send tips and story ideas to Cadence at [email protected] You can also follow her on Twitter @cadencebambenek.