Wise plans to go public in London via direct listing

LONDON – UK financial technology firm Wise said on Thursday it plans to be listed on the London Stock Exchange through direct listing.

Wise, formerly known as TransferWise, said he is looking for a direct listing rather than an initial public offering because he does not need to raise new capital. Direct listings allow companies to go public without involving the underwriters or issuing new shares.

The company said its stock exchange debut would be the first direct listing for a technology company in London.

Founded in 2010, Wise claims to have 10 million customers who use its money transfer service to send £ 5 billion ($ 7 billion) each month. The company competes with incumbents like Western Union and MoneyGram, as well as upstart companies like Revolut and WorldRemit.

News of Wise’s debut marks a big win for Britain, which hopes to convince more big tech companies to sign up in London rather than New York. The government is considering proposals to relax London’s listing rules, making it easier to issue dual class shares, giving founders and early backers more control.

“We are taking steps to become a public company in a transparent and fair manner,” Kristo Kaarmann, CEO and co-founder of Wise, told reporters on Thursday on a conference call.

“We chose a direct listing because everyone has the same opportunity to own a part of Wise, from large institutions to clients. It’s cheaper than an IPO, which helps us cut costs and ultimately helps us in our mission of lowering prices. “

Wise was last valued at $ 5 billion in a secondary stock sale last year. As the company goes public in a direct listing, there will be no stock pricing process, which companies would normally go through with an IPO. A Sky News report said the company was looking for a valuation of up to £ 9bn on its list. Company executives said the prices would be determined by the market.

Wise opts for a two-class share structure in the standard segment of the main London market. The company said it intends to issue two classes of shares, class A and class B. Class B shares would entitle holders to nine additional votes per share. They are non-negotiable, will not be listed and will expire on the fifth anniversary of Wise’s listing, the company said.

The structure means Kaarmann will be entitled to more voting rights than other investors, but no existing shareholder will have more than half of the voting rights simply because of holding Class B shares. Investors have raised concerns in the past regarding governance issues in dual-class structures, but Wise claims that its structure is fair and democratic.

Wise said he would also introduce a client shareholder program called OwnWise, which would allow users to own a stake in the company. Clients participating in the program would be entitled to receive free shares worth up to £ 100 ($ 140) after 12 months. They will also receive other benefits, such as invitations to biannual “mission days”.

“I hope Wise has opened an alternative route to public procurement for other UK tech companies to ensure that we have a thriving tech scene for decades to come,” said Stephen Kelly, president of industry body Tech Nation.

“The UK needs more posters and models to inspire the next generation and it is good to see Wise live out their values ​​by joining the London List family.”

Wise, which has been profitable since 2017, said it made a profit of £ 30.9million on revenue of £ 421million in its 2021 fiscal year. Profits more than doubled from 15million. pounds sterling the year before, while revenue was up 39% from £ 302.6million.

Goldman Sachs, Morgan Stanley and Barclays will serve as lead financial advisers for the listing of Wise, with Citi acting as co-advisor.