TransferWise, the peer-to-peer international money transfer business, has secured a $6 million (£3.9m) investment round led by Valar Ventures, the venture fund founded by Facebook’s first outside investor and co-founder of PayPal, Peter Thiel.
This is the first time that Valar Ventures has made an investment in Europe, suggesting that the UK government's efforts to make Britain the best place to raise money and invest in business may finally be paying off.
TransferWise, based in London’s Tech City, uses peer-to-peer technology to cut out traditional bank fees. Since launching in 2011, the company has transferred over £125m worth of customer money – over half of which has been in the last six months.
TransferWise supports currency transfers between Euro, British Pound, US Dollar, Polish Zloty, Danish, Swedish and Norwegian Krone. The firm continues to grow between 20-30 percent a month.
Thiel’s Valar Ventures led TransferWise’s ‘Round A’ funding, with participation from existing investors and SV Angel. This brings the total TransferWise has raised to $7.35 million in the two years since its launch.
“Innovation in the banking industry typically involves rent-seeking or unsound derivatives, which offer marginal benefits to consumers,” said Thiel. “TransferWise demonstrates true innovation in banking by enabling its users to retain their wealth across borders.”
Taavet Hinrikus, co-founder of TransferWise, said that the investment will help accelerate the company's expansion plans. This year it aims to add a dozen new currencies and launch the site in new markets including Germany, Spain, France, and Italy.
"Transferwise is a shining example of the successful businesses that make Tech City a thriving ecosystem,” said Joanna Shields, CEO Tech City and UK Business Ambassador for Digital Industries.