Fintech star Transferwise is about to land a big backer from Silicon Valley


Transferwise's Taavet Hinrikus has handed over the CEO reigns to co-founder Kristo Kaarmann (Source: Getty)

One of the UK's most successful fintech startups is about to land backing from a top Silicon Valley venture capital firm which has invested in some of the top tech businesses around, according to reports.

Transferwise, the online money transfer company which turned a profit for the first time in May, is in talks with Institutional Venture Partners (IVP), an investor in Netflix, Snapchat and Twitter before they went public, Sky News reports.

The talks come after the startup embarked on a new round of fundraising that is expected to see its value sail past the so-called unicorn valuation of $1bn.

Read more: Transferwise aims to kick off new fundraising to take its value above £1bn

Transferwise has raised $116m to date, according to figures from Crunchbase, from the likes of venture firms Index Ventures, Andreessen Horowitz and Valar Ventures, as well as Baillie Gifford, the Scottish investment firm, with the last round of cash coming in May 2016. One of the earliest UK investors in Transferwise, Seedcamp, cashed out a minority stake earlier this year.

More than £1bn of transfers are made on the platform every month and it has also revealed a revenue run rate of £100m. "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 at the time.

Hinrikus, one of the most outspoken entrepreneurs on Brexit, has since handed over the day-to-day running of the company to co-founder Kristo Kaarmann, becoming chairman and board member on a part-time basis.

Read more: Are unicorns ever profitable? One fintech startup just proved it's possible

Transferwise has set its sights on expansion, opening an office in Singapore which will become a hib for its business in Asia Pacific. And it earlier this year launched its first foray beyond money transfers, with the launch of a "borderless business account" and is adapting to new consumer habits, adding its service to Facebook Messenger in the form of a chatbot. 

IVP is a later stage investor and has recently backed Coinbase, a digital currency wallet, Casper, an online mattress brand, and Google for gifs startup Giphy. Big bets that have paid of for IVP include Snap, Twitter and Netflix.

Investment in UK fintech is on the up, hitting just shy of $1.5bn in the second quarter of the year, the highest since the last quarter of 2015 according to KPMG's Pulse of Fintech report. And there have been a flurry of acquisitions in the payments space, with WorldPay, Paysafe and Monitise all being snapped up in recent months.