TransferWise, the London-based money exchanger, has secured a $25 million Series B investment led by Sir Richard Branson.
Branson is joined by existing shareholders including Peter Thiel’s Valor Ventures, IA Ventures, Index Ventures, TAG (Robin Klein and Saul Klein) and Kima Ventures.
This is the second of Thiel’s investment, who previously led the $6 million Series A round in May 2013.
It brings TransferWise’s total funding to $33 million since it’s launch in 2011.
This new investment suggests that London’s fintech sector is not slowing down.
An alternative model
Banks and brokers charge a lot for international money transfers – even when they claim there are ‘no fees’.
TransferWise instead allows people to access the real, mid-market exchange rate, cutting out traditional bank fees altogether.
‘Ripe for disruption’
Branson has been extremely active in supporting startups, most recently at the Pitch2Rich competition run by Virgin Media Pioneers. He first noticed the peer-to-peer business last year during their campaign to give away $100 million worth of free international transfers to 1000 startups.
Branson said he was delighted to be investing in an innovative company like 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.
Taavet Hinrikus, co-founder of TransferWise, says they are going to use this investment to lead the charge against hidden bank fees and expose the problem to a wider audience.
It’s outrageous that they can get away with advertising that claims their transfers are ‘fee-free’ despite often taking up to 5% of the money sent through the exchange rate.
The business has now transferred over £1 billion worth of customers’ money, saving its users over £45 million in banking fees; and it continues to grow 20% month-on-month.
TransferWise is nominated in our International Hall of Fame in the ‘Superstar’ category. The winners will be announced on Tuesday 17th June.