Realignment: After a name change: FinTech startup Wise wants to be listed on the London Stock Exchange | message
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Exchange plans will become concrete after the name has been changed
A and B shares are intended to secure CEO voting rights
Similarities to Deliveroo fiasco?
Wise is repositioning itself after renaming
In February, the startup TransferWise, which specializes in international transfers, announced a big step: The British FinTech company, which was founded in 2011, announced in a press release that it would now operate under the shortened company name of Wise. “Today our customers need us for more than just money transfers,” said Wise, explaining the name change. “Sending, spending and receiving money internationally is too expensive, too slow and too cumbersome. We take care of it for people and companies.” In the course of this, the London-based company also updated its logos, website and apps, but assured its users that nothing else would change. For example, logging in with the previous access data works without any problems.
Wise share: Brsend is still possible this year
But that’s not the only big change that 2021 should have in store for the young FinTech company. As “CNBC” writes, Wise could already enter the London floor of the stock exchange in the coming weeks via a direct placement. According to its own statements, the company does not want to go via an IPO because it does not need to raise any fresh capital. “We opted for a direct listing because everyone has an equal chance of owning a part of Wise, from large institutions to customers,” added CEO and co-founder Kristo Krmann, according to the news portal. “It’s less expensive than going public, which helps us keep costs down and ultimately supports us in our mission to drive down prices.” This would make Wise the first technology company to be traded via direct placement in London. Originally a stock exchange launch in May was planned, according to Markets.com, but since this period has already passed, the market portal expects an initial listing soon. Wise himself has not yet given a specific date for the start of trading.
Valuation of up to $ 9 billion
For Wise, this also eliminates the stock valuation process that normally occurs during an IPO. Last year, the company – then known as TransferWise – received a valuation of over five billion US dollars. In the previous year, the startup was already valued at 3.5 billion US dollars. With the Brsendebt, Wise could even be worth up to nine billion US dollars, according to a report by Sky News. The company’s management did not want to confirm these rumors, according to CNBC. Instead, the pricing should be determined by the market.
Two-tier structure for more voting rights
At the start of trading, a two-class structure is also to be established for the unit certificates. In addition to the A-shares, Wise also wants to offer B-shares, which guarantee investors nine additional votes each, but are neither tradable nor listed, CNBC continues. Five years after the exchange, the banknotes should then expire. With this strategy, Krmann wants to secure more voting rights than other investors without an existing shareholder holding more than half of the voting rights simply because he holds class B shares.
With a special customer shareholder program called OwnWise, Wise also wants to offer its users exclusive benefits. This will allow customers participating in the program to secure additional shares worth up to £ 100 after twelve months. OwnWise users should also benefit from other advantages. For example, they are entitled to take part in the six-monthly “Mission Days”, an event in which the company reflects on its progress.
Memories of Deliveroo IPO are awakened
Wise’s upcoming launch may in part be reminiscent of the launch of the UK online delivery service Deliveroo. Here, too, a decision was made in favor of a two-tier structure, with which CEO Will Shu secured 57 percent of all voting rights, as the Handelsblatt wrote. This strategy was not at all well received by institutional investors in particular: On the first day of trading, the price of Deliveroo shares in London trading fell by a third at times. Market participants spoke of one of the worst stock exchanges in the history of the London Stock Exchange. But Krmann does not want to be deterred by this. And the chairman of the Tech Nation industry association, Stephen Kelly, also relies on a more successful stock market launch. “I hope Wise has opened an alternative route to the public market for other UK tech companies to ensure we have a thriving tech scene for decades to come,” Kelly told CNBC. “Britain needs more figureheads and role models to inspire the next generation and it is good to see Wise live up to its values and join the London stock exchange family.” It remains to be seen whether Krmann will succeed in doing this with his FinTech startup.
Finanzen.net editorial team
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