Peter Thiel’s Valar Ventures, Index Ventures, Sir Richard Branson and other high profile technology investors have invested USD25m in international money transfer platform, TransferWise – a startup known for its “cheeky” anti-bank advertising.
The fast-growing, London-based company, has pledged to use its new funds to raise awareness of the hidden fees applied to overseas money transfers.
Typically banks and brokers disguise the full cost of their fees by hiding it within the exchange rate they offer. World Bank research shows that this significantly misleads consumers – almost two-thirds of those polled by them were unaware that there was any other component to the cost beyond the transaction fee. TransferWise believes that all costs should be presented upfront and only the mid-market exchange rate should be used to process transactions.
Today, TransferWise publishes independent price comparison research and aPinterest “Board of Shame” featuring its competitors’ advertising on its website. These illustrate the excessive and opaque fees applied by banks and currency brokers for sending money abroad.
Sir Richard Branson, founder of the Virgin Group, said: “I’m delighted to be investing in such an innovative company as TransferWise. Financial services such as foreign exchange have been ripe for disruption for decades and it’s great to see TransferWise bring transparency to the market. It’s encouraging to see entrepreneurs using technology to reinvent the old-fashioned FX industry and make a real difference in the market. I see tremendous opportunity for startups like Transferwise to offer breakthrough financial services and products.”
Taavet Hinrikus, co-founder of TransferWise, said: “We are truly honoured to have Sir Richard Branson join Peter Thiel’s Valar Ventures, IA Ventures and Index Ventures to back our mission to stomp out hidden bank fees and make the world of money transfers a fairer place. This new investment and faith in our business is concrete affirmation that our campaign for transparency is really taking grip. We’re going to use this money to lead the charge against hidden bank fees and expose the problem to a wider audience. It’s outrageous that they can get away with advertising that claims their transfers are ‘fee-free’ despite often taking up to 5% of the money sent through the exchange rate.“
This investment marks TransferWise’s ‘Round B’ funding, with Sir Richard Branson joining as a new investor. Existing investors also participated, including Peter Thiel’s Valar Ventures, IA Ventures, Index Ventures, TAG (Robin Klein and Saul Klein), and the owner of Le Monde Xavier Niel (via Kima Ventures). This brings the total TransferWise has raised to USD33m in the three years since its launch.
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