Can unicorns turn a profit? UK fintech startup Transferwise just proved it's possible

Lynsey Barber
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Transferwise is celbrating a major milestone of profitability

Star UK fintech startup Transferwise has edged into profitability, proving highly valued high-growth private companies backed by venture capital can become sustainable businesses.

The tech firm revealed it's been profitable since the start of the year, the first time in its six year history

Read more: Revolut takes on Transferwise with free money transfers

It has a revenue run rate of £100m, it also said, with more than £1bn transferred on the platform every month by one million customers. The latter number it plans to double by the end of 2017.

"To have hit break-even just six years on from launch shows how strong the foundations of our business are," said co-founder and chief executive Taavet Hinrikus.

"This is just the starting point. With the unique platform we’ve built, we’re looking forward to creating a new kind of financial services for the future," he added, hinting that the company may move beyond money transfers.

Research from GP Bullhound suggests that 60 per cent of European unicorns are profitable, but that will now be pushed higher by Transferwise's addition. It noted highly valued tech startups in the UK are more sustainable than those in the US, where often profitability is years away for startups.

Read more: Meet the 17 high-growth startups being hot-housed by the LSE

Snapchat, one member of the "billion dollar startup club" has tested itself on the public markets after an IPO earlier this year without having made a profit.

However, often companies are sacrificing profit for more ambitious growth. For example, Amazon's revenue has rocketed and it has taken over the world but profits have remained low over the years.

The startup's most recent accounts show full-year revenue for 2015 came in at £28m, up on £10m the previous year, while while pre-tax losses grew to £17m from £11m a year earlier as it ploughed cash into global growth.

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