TransferWise, which makes it cheaper and simpler for consumers and small businesses to send money internationally online, will use the cash injection to expand its services and global presence, it said on Thursday.
London-based startup TransferWise has raised $280 million in a funding round led by asset manager Old Mutual Global Investors and Silicon Valley venture capital firm IVP.
The new round of funding values TransferWise at more than $1.6 billion, according to a source familiar with the matter.
Sapphire Ventures joined the round, as did existing investors Andreessen Horowitz, Baillie Gifford and British billionaire Richard Branson.
Founded by Estonian friends Taavet Hinrikus and Kristo Käärmann in 2011, the startup transfers around $1.2 billion in funds for customers monthly. It became profitable for the first time this year.
“TransferWise is in a pretty strong place today, we are moving significant amounts of money on a monthly basis”, Matthew Briers, finance director at TransferWise, said in an interview. “But we are still pretty tiny in the grand scheme of things, there are still many trillions of dollars that are moving cross-border.”
The company plans to use the funding to expand a recently launched service that enables small businesses to hold money in different currencies they may later need. Similarly to having bank accounts in different countries, this is aimed at helping businesses spend less on conversion fees and hedge against exchange rate fluctuations.
TransferWise is looking to offer this to consumers in the coming months and launch a debit card connected to the accounts. This and other initiatives will require more engineering staff, Briers said.
The company, which recently set up a regional hub in Singapore, estimates it will double its headcount from 800 now over the next 18 months.
It currently serves more than 2 million customers with more than 750 currency routes, and plans to expand to India, as well as Argentina, Chile and Peru.