What’s Going On Here?Wise announced plans on Thursday to make its debut on the London Stock Exchange, and the payment transfer company is confident it’s going places. What Does This Mean?The artist formerly known as TransferWise is eyeing a direct listing, which – unlike an initial public offering (IPO) – cuts out investment banks (and their exorbitant fees) and lets the company list without raising cash. That route makes more sense for Wise: the company sees $7 billion in transfers every month, it’s been profitable since 2017, and it’s doubled its revenue in the past two years. In other words, it doesn’t need cash from investors.
The direct listing means we won’t know Wise’s valuation until investors set it on the day. But the company was last valued at $5 billion in a private fundraising round last year, and one report suggests it might’ve climbed to $12 billion (tweet this). Why Should I Care?For markets: Pros and cons.
Wise’s stock market debut will be the first direct listing of a tech company in London – a big win not just for the UK, but retail investors too. Direct listings, after all, don’t give institutional investors first dibs on shares like IPOs do. There is a drawback, mind you: no investment bank around means there’s no one to keep Wise’s share price from getting too volatile in the early days.
The bigger picture: Get excited.
Wise isn’t the only company getting investors hot under the collar this week: OnlyFans – which provided the bare skin everyone needed to get through lockdown – said it’s looking to raise money from private investors at a $1 billion valuation for the first time. The startup handled more than $2 billion in sales last year, with $400 million in revenue and a profit to boot. The new funding round isn’t just about keeping its regulars happy, either: OnlyFans is looking to erect a more mainstream media platform and – presumably – fall asleep straight after. | 