Deal done: Currency exchange platform TransferWise confirms $280m raise

Currency exchange platform TransferWise has officially confirmed it has raised $280m of Series E funding – in round led by IVP and Old Mutual.

A deal that was rumoured back in August, Sapphire Ventures, Japan’s Mitsui & Co and World Innovation Lab also participated in the round – with existing investors Richard Branson, Andreessen Horowitz and Baillie re-investing.

A US-based private equity investment firm focusing on later-stage VC investments, IVP has previously backed the likes of Netflix, Snap and Twitter.

Founded by Young Guns Taavet Hinrikus and Kristo Käärmann, TransferWise allows consumers to send money between UK and European accounts for a fraction of the price banks charge, by using a peer-to-peer crowd sourced model to get the best rate on the exchange.

Having now raised $397m to date, the fintech start-up will use the investment to eye expansion into the Asian market.

Both from modern-day Estonia, Hinrikus and Käärmann were born into the Soviet Union –  a decade before their homeland would gain independence.

Attributing the limited environment which they were surrounded by as the inspiration and drive behind their entrepreneurial spirit, the duo founded TransferWise after moving to London and experiencing difficulties in exchanging money.

Hinrikus was paid by his employer in Euros but needed Sterling for living expenses, while Kaarmann was paid in Sterling but needed Euros to pay off his mortgage back home.

Waiting until midday for a fair exchange rate to agree on, the pair would exchange currencies with each other, cutting out the banks – before creating a system that allowed others to do the same.

On the investment, Hinrikus said:

“It’s great to have the support of Old Mutual Global Investors and IVP in bringing fair and transparent financial services to more people through our Borderless account.”

Richard Watts, manager of UK mid cap fund at Old Mutual, said:

“Our team looks to invest in companies with the potential to significantly disrupt an industry.

“The opportunity to invest now in a private company, with a hugely exciting global growth story, is particularly compelling and we believe this holding will benefit investors in the funds we manage.”