Wise to go public in direct London listing

Wise, the fintech company previously known as TransferWise, has announced its intention to go public in London through a landmark direct listing.

Kristo Käärmann, co-founder and chief executive, said a direct listing “allows us a cheaper and more transparent way to broaden Wise’s ownership” than a traditional stock market launch.

It does not involve raising any new capital or bringing in new investors but means shares held by Wise’s existing shareholders will become tradable on the London Stock Exchange.

The company’s decision to list in London rather than New York will be seen as a boost for the UK government, which has been trying to make the country more attractive for fast-growing tech businesses.

Its efforts suffered a setback earlier this year when the high-profile initial public offering of Deliveroo was described as the “worst IPO in London’s history” after the stock fell 26 per cent on its opening day.

Like Deliveroo, Wise said it would use a dual-class share structure. However, while Deliveroo’s set-up gave co-founder Will Shu 57 per cent of voting rights, Wise said it would give enhanced voting rights to all existing shareholders, including earlier institutional backers such as Baillie Gifford and Fidelity.

Käärmann said a “widely available” dual class structure would help it keep “the focus on our deeply ingrained mission as we grow at speed”.

Wise, which was valued at $5bn in a secondary share sale last year, did not provide any guidance on pricing, which in a direct listing is determined when it joins the market.

TransferWise opened in 2011 offering cheap cross-border consumer money transfers. The company renamed itself Wise in February in an effort to highlight a shift toward a broader product offering.

Wise has been seeking to attract more profitable business customers and introducing more complex banking services such as multicurrency current accounts.

It reported revenues of £421m in the 12 months to March, up from £303m the previous year. Pre-tax profit doubled to £41m.

Direct listings have become increasingly popular among technology companies in the US, but Wise would be the first technology company to do so in the UK.

Although the LSE has long allowed companies to be “introduced” without raising capital, Wise would be the largest company to be introduced without already being listed elsewhere or spun out from an existing business in more than two decades.