London-based money movement startup TransferWise announced it has received a further $26 million in funding to expand into the small business market.
TransferWise’s valuation now stands at $1.1 billion, according to TechCrunch — so the birth of a fintech unicorns is not a thing of the past. TransferWise allows users to send money across international borders quickly and cheaply, and perhaps most importantly, with transparency.
TransferWise is a peer-to-peer currency transfer network. Users in the U.S. looking for euros, for example, get matched with others looking for dollars. Using posted exchange rates, TransferWise swaps the funds for a small fee. Banks, which route funds more slowly and can take hefty fees, are cut out of the loop. The magic to it is software, and the internet.
The company employs some 600 people and has operations in the U.S. as well. The U.S. is notoriously difficult for money transmittal services, with separate licences required by each of the 50 states and Washington, D.C., while a single license covers the entire Eurozone.
TransferWise is now covering business cross-border payments, and says its rates are 1/7 what a bank would charge — if the bank even tell you. “Banks have traditionally made it very hard to understand how much small businesses are paying and for what. They are being taken advantage of,” co-founder Taavet Hinrikus told The Telegraph.
The new product offering is called TransferWise for Business. In terms of disruption vs. cooperation for banks, TransferWise falls squarely in the disruption camp. The company was founded in 2011 and has amassed $117 million in total funding from the likes of Andreessen Horowtiz, Valar Ventures, and Edinburgh, Scotland-based Baillie Gifford, which led the most recent round.1 - Reader Likes This Post