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There is conventional, unconventional, and just downright off the wall…
Sending an out-of-body message to London’s entire financial sector, technology startup TransferWise, an enterprise backed by Richard Branson, staged a parade which traversed the route between London’s Bank Station in the heart of the financial district and the “silicon roundabout” technology cluster in Islington’s trendy Old Street.
The purpose of this ghoulish procession on Halloween was to outline the company’s intention to remove what it considers to be hidden fees within the traditional banking system as TransferWise campaigns for greater transparency within FX transactions.
Founded by Estonian friends Taavet and Kristo, who intentionally omit their family names from their corporate profiles, TransferWise was established subsequent to the tech-savvy duo having come up with the idea for building the platform when they first became expats in London and were confronted by the high fees banks charge to transfer money abroad.
Taavet had worked for Skype in Estonia, so was paid in euros, but lived in London. Kristo worked in London, but had a mortgage in euros back in Estonia.
They realised they each needed the currency the other had, so they devised a simple plan: every month Kristo put pounds in Taavet’s British bank account and Taavet put euros in Kristo’s euro account. They used the official mid-market rate exchange rate (that’s the one in the papers, not the one invented by the bank). They both received the right amount of money, and neither paid any bank fees.
Within a few months they had saved thousands of pounds and realised there were probably millions of others that needed a system just like theirs. TransferWise considers that many banks take as much as 5 percent of the money being sent. Therefore, this solution aims to allow people to transfer money abroad at a lower cost than ever before. It uses technology developed by some of the pioneers of Skype and PayPal to remove all the fees the foreign exchange industry has kept hidden for decades. Customers have already moved more than £1bn using the platform – an approach that has put over £45m back in their pockets.
The business has transferred over £1bn worth of customers’ money, saving its customers over £45m in banking fees.
TransferWise started in early 2011 with the two founders, making transfers between just British pound and euro. It has since added a further 150 members of staff and 252 currency routes. The firm continues to grow between 20-30 percent a month.
TransferWise has attracted $33m from some of the world’s leading investors. Most recently this includes Richard Branson and Facebook’s first outside investor and co-founder of PayPal, Peter Thiel. TransferWise was his first Valar Ventures investment in Europe.
Other investors include SV Angel, fellow PayPal founder, Max Levchin, IA Ventures, Index Ventures, TAG (Robin Klein and Saul Klein), Seedcamp, Betfair’s former CEO David Yu, and the owner of Le Monde Xavier Niel (via Kima Ventures).
TransferWise is fully regulated by the UK’s Financial Conduct Authority under the license number 571669