Valar Ventures, Index Ventures, Sir Richard Branson and other investors have invested $25m in international money transfer platform, TransferWise
Peter Thiels Valar Ventures, Index Ventures, Sir Richard Branson and other high profile technology investors have invested $25m in international money transfer platform, TransferWise – a startup known for its cheeky anti-bank advertising.
The fast-growing, London-based company, has pledged to use its new funds to raise awareness of the hidden fees applied to overseas money transfers.
Typically banks and brokers disguise the full cost of their fees by hiding it within the exchange rate they offer. World Bank research shows that this significantly misleads consumers – almost two-thirds of those polled by them were unaware that there was any other component to the cost beyond the transaction fee. TransferWise believes that all costs should be presented upfront and only the mid-market exchange rate should be used to process transactions.
Today, TransferWise publishes independent price comparison research and a Pinterest Board of Shame featuring its competitors advertising on its website. These illustrate the excessive and opaque fees applied by banks and currency brokers for sending money abroad.
Sir Richard Branson, founder of the Virgin Group, said:
Im delighted to be investing in such an innovative company as TransferWise. Financial services such as foreign exchange have been ripe for disruption for decades and its great to see TransferWise bring transparency to the market. Its encouraging to see entrepreneurs using technology to reinvent the old-fashioned FX industry and make a real difference in the market. I see tremendous opportunity for startups like Transferwise to offer breakthrough financial services and products.
Taavet Hinrikus, co-founder of TransferWise, said:
We are truly honoured to have Sir Richard Branson join Peter Thiels Valar Ventures, IA Ventures and Index Ventures to back our mission to stomp out hidden bank fees and make the world of money transfers a fairer place. This new investment and faith in our business is concrete affirmation that our campaign for transparency is really taking grip.
Were going to use this money to lead the charge against hidden bank fees and expose the problem to a wider audience. Its outrageous that they can get away with advertising that claims their transfers are fee-free despite often taking up to 5% of the money sent through the exchange rate.
This investment marks TransferWises Round B funding, with Sir Richard Branson joining as a new investor. Existing investors also participated, including Peter Thiels Valar Ventures, IA Ventures, Index Ventures, TAG (Robin Klein and Saul Klein), and the owner of Le Monde Xavier Niel (via Kima Ventures). This brings the total TransferWise has raised to $33 million in the three years since its launch.
The business has transferred over £1bn worth of customers’ money, saving its users 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 100 members of staff and 234 currency routes. The firm continues to grow between 20-30 percent a month.
TransferWise has attracted $33m from some of the worlds most sought after investors. Most recently this includes an investment round led by Richard Branson, founder and CEO of Virgin Group. In May 2012, Facebooks first outside investor and co-founder of PayPal, Peter Thiel led a $6m investment in the company. This marked 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, Betfairs former CEO David Yu, and the owner of Le Monde Xavier Niel (via Kima Ventures).
International money transfers are more expensive than meets the eye – even when banks and brokers claim there are no fees. Many banks take as much as 5 percent of the money being sent. TransferWise is the clever new alternative that allows people to transfer money abroad at a lower cost than ever before. It uses technology developed by the people who built 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.