TransferWise founders to cash out tens of millions as IVP invests at $1.6 billion valuation

Peer to peer money transfer provider TransferWise is getting set to announce its latest funding round, which will also see co-founders Taavet Hinrikus and Kristo Kaarmann and some other early investors cash out some of holdings.

The financing round, to be led by Silicon Valley venture capital fund IVP, will apparently be done at a $1.6 billion valuation for TransferWise. IVP is one of the original Sand Hill Road VC firms established in the early 1980s. Some of its investments have included Twitter, Snap, Dropbox, Slack, Juniper Networks, Kayak, and Netflix. IVP will join existing TransferWise investors such as Richard Branson and PayPal co-Founder Peter Thiel.

Taavet Hinrikus and Kristo Kaarmann

Taavet Hinrikus and Kristo Kaarmann

Given the strong demand for the round, Mr. Hinrikus and Mr. Kaarmann alongside some other early TransferWise investors will be selling some of their shares in the round to the new investors. According to Sky News, the two co-founders hold about 40% of the company’s shares pre-deal, and will be selling roughly 20% of their combined holdings, for somewhere in the $100 million range.

The idea for TransferWise was born when Taavet Hinrikus and Kristo Kaarmann were friends and coworkers at Skype. Taavet worked for Skype in Estonia and was paid in euros, but lived in London. Kristo worked in London, but had a mortgage in euros back in Estonia. They devised a simple scheme. Each month the pair checked that day’s mid-market rate on Reuters to find a fair exchange rate. Kristo put pounds into Taavet’s UK bank account, and Taavet topped up his friend’s euro account with euros. Both got the currency they needed, and neither paid a cent in hidden bank charges. “There must be others like us,” the epiphany went. And TransferWise was born.

Read Also: