Wise goes public today in largest direct listing

Karthik Subramanian

Wise, one of the largest fintech firms dealing with money transfer across borders, has gone public today at the London Stock Exchange in what is viewed as the largest direct listing in UK history.

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The company has been profitable for many years now and hence the shares are expected to be in great demand. But the UK is still not fully out of the pandemic and so it will be a test of the risk appetite of the retail and institutional investors to see whether they lap up the shares or choose to wait and see.

The listing is valued at a total of £8bn and unlike an IPO, this is a direct listing which means that the shares are available to the public only through the exchanges. A direct listing is easier and less complicated and this is a way of cutting down costs for the company as well. It also truly provides a truly level playing field for all as both small and big traders get a chance to purchase the shares at the exchange only and these shares are not new ones but those that are already held by the early investors into the company. But this could also turn out to be a challenge as many investors may not be aware and many shares may not come to the market which means that it may not generate as much buzz as a normal IPO.

As part of a speech to Wise employees, Kristo Käärmann, CEO and co-founder said: “Wise was created to solve the problem of the billions unknowingly spent in hidden fees every year on currency exchange. Those are the billions we care most about, even today.”

“Our listing is incredibly exciting, and lots of hard work from many people have made it a reality. But, it’s important to remember that we’re still very early on in our journey. Moving money into another currency is still a maze of hidden exchange rate mark-ups, high fees, delays, and small print for many people. We’re currently saving customers around £1 billion a year in these hidden fees. The £149 billion that’s still to go remains our focus.”

As a company and as a business, Wise has proved itself over the years as it was a pathbreaker and disruptor in the remittance market by cutting down fees in a big way. It was able to do that as it didn’t do the remittance in the normal manner like other companies but chose to retain balances in specific countries and did a rebalancing of these which helped it to overcome the huge fees.

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