Wise, which was formerly known as TransferWise opted to list in London Stock Exchange through direct listing or selling, a rare method of going public that is gaining popularity among technology companies in the United States, pioneered by Spotify and followed with Coinbase, Roblox, and Slack.
TransferWise was founded in 2010 by Estonian friends Taavet Hinrikus and Kristo Krmann. Rebranded to Wise in February 2021, it has grown its revenue from $422 million to $586 million in its 2021 fiscal year.
Shares of Wise opened at 8 that gave the money transfer company a market value of 8 billion ($11 billion) on its market debut. $11 billion market capitalization is more than double the $5 billion private investors had valued the company in 2020. Wise debut has turned out to be the biggest London tech listing by market cap in the history of the London Stock Exchange.
Wise's debut is a big win for multiple stakeholders and especially for:
Staying on-brand of this challenger bank, Wise also introduced a program called OwnWise, which lets users own a small stake in the company. Users participating in the OwnWise scheme would be entitled to receive bonus shares worth up to a maximum of 100 after 12 months.
Direct listing means only existing and outstanding shares are sold with no underwriters involved rather than raising money in a traditional IPO (Initial Public Offering) wherein shares are created, underwritten by institutional investors, and sold to the public.
Direct listing allows companies to bypass what can often be a very cumbersome and expensive process to get through an IPO by cutting out as many intermediary costs as possible. Seeing the record-breaking response led by Wise could signal other tech companies to follow the path.