Kristo Käärmann and Taavet Hinrikus, the two Estonian founders of Wise, a money transfer company, are now billionaires after the company’s direct listing at the London Stock Exchange.
Wise, formerly known as TransferWise, started trading at the London Stock Exchange on 7 July and after their first day of trading, the company’s shares went up by 10%. The shares opened at £8.00 and closed at £8.80, valuing the company at £8.75 billion – or US$11 billion. At the time of writing this article, the shares were trading at £9.67.
A direct listing means the company will not raise new capital or involve new investors, but the shares owned by Wise’s existing shareholders became tradable on the London Stock Exchange.
The listing of Wise was London’s largest ever tech listing. Wise has now become London’s biggest tech company by market capitalisation.
The company’s initial success at the London Stock Exchange gave Estonia two new billionaires. At the end of the first day of trading, Kristo Käärmann’s share of the company was valued at €1.92 billion (US$2.28 billion) and Taavet Hinrikus’s at €1.11 billion (US$1.32 billion).
Käärmann also became the richest person in the Baltic states. Thus far, Nerijus Numavičius, the part-owner of the Lithuanian supermarket chain Maxima, held the title with the wealth of around €1.2 billion.
The most valuable fintech startup in Europe already in 2019
TransferWise was launched as a peer-to-peer money transfer startup in London in early 2011 by Estonians Taavet Hinrikus, Skype’s first employee, and Kristo Käärmann. The firm started with making transfers between the British pound and the euro, over the years expanding to other currencies. In 2014, the British businessman Sir Richard Branson, the founder of Virgin Group, invested US$25 million in the TransferWise.
By 2019, TransferWise was the most valuable fintech startup in Europe, valued at US$3.5 billion. Btý July 2020, its value had increased to US$5 billion, making the founders – Käärmann and Hinrikus – the wealthiest Estonians. In 2020, the company made a £30.9 million (US$43 million/€36 million) profit on a revenue of £421 million (US$587 million/€491 million).
In early 2021, TransferWise shortened its name to simply Wise. The company is headquartered in London but retains a sizable office also in Estonia.
The London Stock Exchange is one of the oldest exchanges in the world. As of 2020, it is the eighth largest stock exchange in the world. Despite Brexit, London has retained its status as a global financial centre – in the Global Financial Centres Index, the city is second, just behind New York.
Cover: Kristo Käärmann and Taavet Hinrikus, the founders of TransferWise, now known as Wise. Photo by Wise.