Finding a way around bank fees used to be a serious challenge before peer-to-peer money transfer services came along. TransferWise is one of the many services of this type, but its popularity is rising faster than most of its counterparts. Since 2011 when the company entered the market, it greatly increased its customer base by helping people save as much as 90% in transaction fees.

In a world defined by globalization, transferring money beyond borders is a routine process and banks used to profit a lot. TransferWise tries to change the rules of the game and the fact that they had a head start among peer-to-peer services help their cause. They are now growing their business by investing in the latest technologies and also raising significant amounts from visionary investors.

They already accept dozens of currencies and are approved by the UK Financial Services Authority, therefore project an image of trustworthiness. TransferWise can now brag about processing hundreds of millions of dollars every month and these figures caught the eye of Scottish asset manager Baillie Gifford. In a recent deal, the peer-to-peer money service raised $26 million, another important milestone for a company that has been rumored to be raising money since 2015.

TransferWise now valued at nearly €1 billion

When rumors broke out about the talks with Baillie Gifford, it was estimated that the company would raise as much as $70 million. The actual amount is less than 40%, still large enough to push TransferWise above the psychological threshold of $1 billion. Following the significant founding round of last January, this is the most important financial achievement and a confirmation of their stellar track record.

The new investors have expressed their confidence that the returns will be generous and they expect TransferWise to put this money to good use. Baillie Gifford recently celebrated one century of existence, with the institution having nearly $200 billion in assets under management. Having access to such huge amounts doesn’t mean that they take investment slightly and the fact that they chose the peer-to-peer money service speaks volumes about their confidence.

TransferWise is moving larger amounts than ever before, which in turn results in more than $30 million saved by customers every month. Having such an important investor on board is expected to signal other big players that the peer-to-peer money industry is worth investing on. The results of this new round of financing should be reflected in the expansion of the currency routes. At the time of writing, the company supports 600 of them and 150 currency routes were launched by the end of 2016. One of their recent and most important money transfer corridors is between the United States and Mexico.

Screenshot of TransferWise Homepage. © TransferWise
Screenshot of TransferWise Homepage. © TransferWise

TransferWise gains more exposure in the media

Raising $26 million brought the peer-to-peer money company back in the spotlight after signing equally impressive deals with other major groups. Andreessen Horowitz, Seedcamp Peter Thiel's Valar Ventures, Sir Richard Branson and Index Ventures are some of their biggest investors. So far, the company raised nearly $100 million and if past performance is an indicator for future results, 2017 should be even better.

They expect customers to spread the news and bring more people to their network, but also run advertising and marketing campaigns. Most of them are amusing, as TransferWise frequently taunts the banks by highlighting the high fees they charge and the advantages of peer-to-peer money transfers. Whether the lobby of the banks was effective or the UK Advertising Standards Association found their campaigns too bold, one thing is certain: a recent ad was censored.

These are only minor bumps in the road, because overall the campaigns have reached their target and contributed to the constant expansion of the customer base. The company is still determined to obtain a license that would allow it to operate in the United States, as it is currently working through a third party.

This strategy was only partially successful, because even though they secured their goal of attracting American clients, their partner ran into regulatory problems. TransferWise is optimistic that in a not so distant future, it will have its very own US bank license that will allow it to operate in complete accord with the law. Security of funds and transparency of business has always been a chief priority for the peer-to-peer money service and a catalyst for its growth.

TransferWise engages people on a personal level

Back in the day when resources were scarce and confidence in the services provided by peer-to-peer money transfer companies was low, TransferWise relied mostly on word-of-mouth. It made the most of the positive reviews that appeared in the press to convince prominent people such as Sir Richard Branson to invest in their venture. This resulted in a snowball effect, with more investors jumping on the bandwagon and now things are moving ahead almost on their own volition.

Good news travels fast and people are more aware today of the advantages of using peer-to-peer money transfer services compared to sending cash through banks. The five-star rating of those reviews published on TrustPilot and other industry relevant websites led to high expectations. Kristo Käärmann and Taavet Hinrikus strongly believe that their company can meet and exceed these expectations, just as they did ssince 2011. They have a clear vision and now they also have the resources necessary to convert most of the dreams into reality.

Globalization is not going to stop anytime soon, so it’s only fair to assume that peer-to-peer money transfer services are here to stay as well. TransferWise worked hard to establish a dominant position in this line of work and there is no reason to expect them to falter. The $26 million raised this month will make it easier for them to finance new currency routes, but they also positively impact the company on other levels. The group has a bright future ahead, despite the increasingly tougher competition from banks and other peer-to-peer money transfer companies.

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