London Fintech Wise Retains Control in Float

April 4, 2021
Kevin Larkin

Europe is home to some of the world’s most innovative and experimental fintech companies. The United Kingdom has especially been making global news in their efforts to remain competitive in the extremely exciting European fintech market after Brexit has left them nearly severed from the industry. London has been home to many successful startups, including Wise, which is an international money transferring application which recently changed its name from TransferWise in February of this year, to reflect that they are going to be expanding their services past just money transfers. Wise and Kristo Kaarmann, who is the company’s chief executive, have announced that they will be keeping control of the company along with their early investors if they decide to pursue a London Stock Exchange floatation, which seems very likely. Wise has disclosed that there have been discussions between them and their bankers to form a dual-class share structure in their effort in filing for an IPO to go public later this year. None of this is concrete as of early April, but these talks are promising, and this will most likely be the structure they decide to go with if Wise decides to go forward with a London float. For a clear definition, a float in terms of stocks refers to their regular shares issued to the public which are available for investors to trade.

Those close to Wise have received information from early investors that this float would allow them to convert their current holdings into a new class of shares that the dual-class structure would create. This is not the typical way to perform blue-chip listing, and has some worried about Wise’s corporate governance. Wise has stated that there is no reason for worry, as this will diversify the dual-class shares meaning that all the power, responsibilities, and risk won’t fall upon one person, and instead be diversified to many. If this works as planned, this can mean limitless potential for Wise in international markets, as they already handle approximately €5.3 billion in transactions every month alone. Another concern raised is just how ideal London and the London Stock Exchange are for this operation, as it makes sense for Wise since that’s where they’re based out of, but Britain has been under a microscope for technological attractiveness since Brexit. If there’s anything that should reassure those skeptics, it’s that Wise has massive success before Brexit, and continues to now, so there’s few reasons to believe they won’t continue this upward trajectory if this float occurs.

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