Wise shares tumble as co-founder sells £81.5m stake
Shares in fintech company Wise (WISE.L) fell as much as 5% on Friday after its co-founder sold a £81.5m ($112m) stake in the firm.
The sale by Taavet Hinrikus was priced at 815p per share, representing a 4% discount to the Thursday’s closing price.
The Estonian expat sold around 10 million Class A shares in the company, which debuted on the London Stock Exchange in July this year, through an accelerated bookbuilding process, Reuters first reported.
The move is believed to have come as a bid to finance his growing pool of startup investments. However, Hinrikus’ private investment firm will still hold on to its 54 million class B shares.
Earlier this week, Wise posted a growth in second-quarter revenue driven by higher customer numbers, attracted in part by lower prices. It said almost 4 million customers transferred £18bn over the period, up 36% from the previous year.
It expects its take rate (the percentage of money being transferred over its platform that it books as revenue) for the second half to be slightly lower than in the first half. But still anticipates revenue growth for the year to March 2022 to be in the low- to mid-20% range over the previous year.
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The company, which was formerly known as TransferWise, specialises in cross-border transfers and is one of Britain’s most well-known fintech unicorns – a company worth more than $1bn (£730m).
Wise made its market debut on the London Stock Exchange via a direct listing rather than selling shares at a set price in advance.
This meant that the opening price was determined in an open auction on the date of admission to the exchange. In direct listings, companies sell shares directly to the public without getting help from intermediaries.
This happens when firms can not afford underwriting, do not want share dilution, or are avoiding lockup periods, a less-expensive option than an IPO, according to Investopedia.
The method was pioneered by Spotify (SPOT), which used a direct listing to join the New York Stock Exchange in 2018. However, it is rarely seen on this side of the Atlantic.
Virgin mogul Sir Richard Branson was an early backer of the company, as was famed Silicon Valley venture capital firm Andreessen Horowitz. More recently, Scottish money manager Baille Gifford has also become a significant shareholder.