After a direct listing at 800 pence, Wise made its debut on the London Stock Exchange. It was then upped to 813 pence within a few hours.
Wise, formerly TransferWise, has a valuation of close to $11 million and has chosen a direct listing this allows existing shares to be floated without the need for new shares. The market sets the opening price, which was just below 800 pence according to Daily Reuters. reported it Refinitiv data.
The direct listing does not use intermediaries or underwriters and was developed by Spotify in the U.S. three years ago. It is a unique maneuver for London. Direct listings were used by Coinbase and Slack to go public.
While direct listings do not require underwriters, Wise was advised and assisted by Morgan Stanley and Goldman Sachs. Daily Reuters reported that Kristo Kaarmann’s dual-class share structure grants him enhanced voting rights for five years. This is a scheme Alphabet and Facebook use.
The company was founded in 2011 by Taavet Hinrikus, Kristo Karmann and is competing with wire transfer giants Western Union or MoneyGram as well as FinTech newcomers Revolut or WorldRemit. Wise claims it has over 10 million users who send $7 billion each month cross-border.
Wise’s largest shareholders are the founders, Karmann holding 18.8 percent and Hinrikus 10.9 percent. According to Daily Reuters, Peter Thiel’s Valar Ventures, an external investor, holds a 10.2 percent stake in the London-based company.
It is anticipated that the listing will be included in the largest FloatsIn in 2021. Wise broke even in 2017, and doubled its profits to $42.7million, with a 39 percent increase in revenue in the fiscal year 2021.
“We are here to fulfill a long-term mission. Kristo Karmann, co-founder, and CEO of the company said that this structure will be in place for a transition period of five years so we can concentrate on our mission.
Hinrikus was CEO from 2013 to 2017, before becoming chairman. Leave the company sometime next year. David Wells, an ex-chief financial officer at Netflix, will replace Hinrikus as Wise’s non-executive chairman.