LONDON-based peer-to-peer currency transfer service, TransferWise has raised $58m investment from Andreessen Horowitz, a US venture capital firm. The start-up will use these funds for global expansion. It opens its US office next month and will be opening offices in Germany and in Australia in the next few months. The company plans to open 300 further currency routes in the next year.
TransferWise is a platform that allows people to transfer money abroad at lower cost than those offered by banks or brokers, using technology developed by the people who built Skype and PayPal to remove all the fees the foreign exchange industry has concealed for decades. The company has already received $91m from some of the world’s leading investors such as Sir Richard Branson and Facebook’s first outside investor and co-founder of PayPal, Peter Thiel.
TransferWise customers have already transferred £3bn using the platform saving them £135m in fees. The company launched in 2011 by its two Estonian founders Kristo Käärmann and Taavet Hinrikus making transfers between the British pound and euro. The company now has 250 members of staff, 292 currency routes and grows between 15-20 per cent a month.
The company also announces today the appointment of two regional managers: Joe Cross in the US and Moritz Kork in Germany.
Ben Horowitz, co-founder of Andreessen Horowitz, said: “We are thrilled to be backing Taavet and Kristo. They discovered an important secret and are are uniquely prepared to pursue it.
“Not only is their solution 10 times better than the old way of exchanging foreign currency, but it could not have come at a better time. Since there has been little to no innovation from the traditional banking sector, we see massive opportunity for new financial institutions like TransferWise.”
Taavet Hinrikus, co-founder of TransferWise, added, “Andreessen Horowitz’s interest in TransferWise shows how ripe financial services are for disruption. For too long legacy providers’ dominance of the market has allowed consumers to be hoodwinked into paying huge hidden charges for services as basic as currency exchange.”
by Caroline Simpson