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Don’t expect any large buyouts from
Wise
,
the U.K. cross-border payments company that went public earlier this year.
Acquisitions have never been part of Wise’s growth strategy, according to Ryan Zagone, head of Americas for Wise.
“We focus on building in house,” Zagone told Barron’s on the sidelines of Money20/20 in Las Vegas. Wise is one of roughly 2,300 companies that are attending the conference, which is considered the biggest for fintechs in North America.
Wise (ticker: WISE.UK) went public in July on the London Stock Exchange via a direct listing. The company didn’t sell shares with its direct listing but allowed investors to unload their stock. Wise ended its first day of trading with an $11 billion valuation. It appears to be the first direct listing of a tech company on the London exchange.
The success of the Wise offering doesn’t mean other companies will soon launch their own direct listing, Zagone said. “The direct listing makes sense depending on your strategy. Our strategy wasn’t one of raising funds but of distributing shares to get closer to customers,” he said.
With a direct listing, Wise didn’t raise any money. “We’re well-funded, growing and profitable,” Zaggone said. “An IPO is typically wanted to raise funds. That wasn’t our need.”
Wise used the direct listing to get closer to its customers, Zagone said. The company gave shares to 2,000 of its most active and longest users, he said. “The closest you can get to a customer is giving ownership,” he said.
Founded in 2010 and launched in 2011, Wise is the former
TransferWise
.
The fintech provides cross-border payments for about 11 million customers, including 300,000 small businesses. It processes over 5 billion pounds ($7.6 billion) in cross-border transactions every month.
Payfare
(PYFRF), which powers digital banking and payments for gig workers that helps them get paid instantly, said Monday that it was embedding Wise into its digital banking platform. This will allow North American gig and contract workers to send money abroad using Payfare’s digital banking app, which leverages Wise’s payments infrastructure, a statement said.
Wise has recently made it possible for U.S. investors to buy stock in the company. In September, the company’s American depositary receipts began trading on the over-the-counter market. One Wise ADR represents one underlying Wise class A ordinary share, a statement said. Wise ADR’s are available under the ticker WIZEY.
The Covid-19 pandemic in 2020 caused businesses all over the world to digitize. It caused a shift in small-business behavior with companies becoming much more cost conscious during the pandemic, Zagone said. They began moving away from banks to payments providers that are cheaper and faster, he said.
Wise can send international payments that are six to eight times cheaper than a bank, Zagone said. He estimated that 40% of Wise payments settle in under 20 seconds while banks can take from three to five days. Wise added 10,000 new business customers every month of 2020, he said.
“Covid19 caused a need for digital payments and a shift to providers offering that quick user experience,” Zagone said.
Write to Luisa Beltran at luisa.beltran@dowjones.com
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