LONDON: British financial technology firm Wise listed on the London stock market on Wednesday, valued at £8 billion (RM45.87 billion) in a key post-Brexit boost for the sector.
The global money transfer specialist launched at £8 per share under a direct listing, which does not seek to raise capital but enables public trade.
The operation is cheaper and said to be more transparent than a traditional initial public offering (IPO) that involves issuing of new shares. The valuation later increased in afternoon deals with the share price rising 5.0% to 840 pence.
“The Wise listing will be another test for London as a fintech hub, as the UK grapples with its post-Brexit status in an era when it has struggled to attract fast growing companies looking to launch an IPO,“ said Hargreaves Lansdown analyst Susannah Streeter.
Wednesday's news is the latest post-Brexit boost for London, which regained its crown as Europe's top equity trading centre, according to recent data from CBOE Global Markets.
The British capital had lost the top spot to Amsterdam after Britain's departure from the EU at the start of this year.
Wise, founded in 2011 as TransferWise, had previously been valued at US$5 billion. The firm now has around six million customers and 2,400 employees worldwide.
Speaking last month, chief executive Kristo Kaarmann said Wise was moving money around the world “faster, cheaper, easier and completely transparent”. The direct listing allowed for “a cheaper and more transparent way to broaden” ownership, he added.
Unlike many fintech companies that struggle to generate a profit, Wise has been profitable since 2017. The group won customers during pandemic lockdowns as people sought alternative ways of transferring cash.
However, analyst Streeter sounded a note of caution due to threats from growing competition and volatile foreign exchange markets.
“The company has rivals snapping at its heels in the revolutionary world of payments and to stay competitive it may be forced to cut fees faster than it can reduce costs,“ she warned.
“Excessive volatility in currency markets could also affect its profits.”
Wednesday's news represents the largest tech listing on the London Stock Exchange and the largest ever UK company that is not listed on other exchanges.
The LSE added that Wise's admission showed how the UK’s public markets were “attractive for both high-growth innovative businesses and for a broad range of investors”.
“Wise joining ... demonstrates that global tech companies can build, scale-up and go public in London,“ said LSE chief executive Julia Hoggett. “London offers access to deep pools of international capital, alongside high standards of corporate governance and effective regulations.” – AFPPIX
