London-based peer-to-peer money transfer service TransferWise has raised $US58 million in a new round of funding that values the company close to $US1 billion.
The Series C funding round is led by US venture capital firm Andreessen Horowitz. Previous investors Valar Ventures, Index Ventures and Seedcamp also participated, reports TechCrunch.
Ben Horowitz, a founding partner at Andreessen Horowitz with an interest in financial technology, is to join TransferWise’s board — a first for him for a European startup, according to the Financial Times.
TransferWise allows users to transfer money across borders and currencies significantly cheaper than the transfer options offered by traditional banking services. Founded by former Skype employees, it’s transferred more than $US3 billion on its platform and is growing steadily — between 15% and 20% every month, reports the FT.
The European technology scene has historically lagged behind the US, and in that context the funding is an impressive achievement. But even in Silicon Valley, the billion-dollar mark is a significant milestone. CEO of Slack David Butterfield recently told Fortune that being in the “Billion Dollar Club” helps acquire new customers and talent. “One billion is better than $US800 million because it’s the psychological threshold for potential customers, employees, and press,” he said.
However, that Andreessen Horowitz led the round is itself a strong sign of increasing US interest in the European technology scene. Google Ventures also launched a European arm last year.
Horowitz said in a statement that he is “thrilled to be backing [TransferWise founders] Taavet [Hinrikus] and Kristo [Käärmann]. 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.”
CEO Taavet Hinrikus said that “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.”
The new funds will help finance global expansion and more than double the currency options it offers.
The news comes less than a week after music-discovery service Shazam, another British startup, announced that a new round of funding had valued the company at more than $US1 billion. TransferWise falls just short of this “unicorn” status — for now.