UK payment startup TransferWise has announced that is has closed a $58 million Series C funding round led by venture capital firm Andreesen Horowitz. Also participating in the round were previous TransferWise investors including Sir Richard Branson, Peter Thiel’s Valar Ventures, Index Ventures, IA Ventures and Seedcamp. According to TransferWise, the funds will be used to assist in their global expansion, with a US office to be opened next month and locations in Germany and Australia coming soon. The expansion plans are part of a goal to open 300 new currency routes over the next year.
Launched in 2011, TransferWise has become one of Europe’s fastest growing startups, providing low cost currency transfers primarily to the retail market . The firm actively competes against banks and legacy currency transfer firms like Travelex and Western Union in the UK and other parts of Europe.
Providing money transfers with only a 0.5% commission by matching two currency flows, TransferWise is able to compete aggressively on costs against banks and legacy players in the field. The model has allowed them to carve out a growing niche in the currency transfer market. Users have transferred £3 billion on the platform since its launch. According to the firm, they currently are growing 15-20% per month and have quickly expanded their workforce to 250 staff members.
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An investor in public firms Facebook, Twitter and Box, Andreesen Horowitz has become one of the most successful venture capital funds over the last decade. An investor in Coinbase and other Bitcoin related startups as well as Dwolla, the venture firm has a focus on disruptive fintech opportunities. As such, their interest in TransferWise continues a trend of making bets in payment companies that are using innovative methods to optimize the way we use and transfer money.
Commenting on the investment, co-founder of Andreessen Horowitz Ben Horowitz stated, “We are thrilled to be backing Taavet and Kristo. They discovered an important secret and are are uniquely prepared to pursue it. Not only is their solution 10 times better than the old way of exchanging foreign currency, but it could not have come at a better time. Since there has been little to no innovation from the traditional banking sector, we see massive opportunity for new financial institutions like TransferWise.”
Co-founder of TransferWise Taavet Hinrikus added, “Andreessen Horowitz’s interest in TransferWise shows how ripe financial services are for disruption. For too long legacy providers’ dominance of the market has allowed consumers to be hoodwinked into paying huge hidden charges for services as basic as currency exchange.”