FinTech Boom – $5B Wise IPO may be done in Facebook style

Kristo Kaarmann Wise co-founder and CEO
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According to Sky News, the UK FinTech pioneer Wise (previously known as TransferWise) is in the final stage of its IPO preparation. The plans include introducing a dual-class share structure to keep control of the company in the hands of its founders Taavet Hinrikus and Kristo Kaarmann, and early investors. Sky News has learned that Wise and its bankers plot the creation of a new dual-class share structure as part of proposals to go public on the London Stock Exchange.

Wise has appointed Goldman Sachs and Morgan Stanley to work on the IPO. This team also led the Facebook IPO in 2012, implementing a dual-class share structure. Not surprisingly, this idea is also being considered at Wise, right?

With this dual-class share structure, Kristo Kaarman, as Wise CEO, would retain control of Wise even though he would only hold about 20% of the shares after the IPO. We have also seen a similar structure at Facebook where founder Mark Zuckerberg still controls the company with a similar structure. Zuckerberg holds less than 30% of Facebook’s shares but controls more than 57% of the voting rights. In the dual-class plot, early investors such as Richard Branson, Baillie Gifford, and Andreessen Horowitz would also be able to convert their holdings into the new class of shares.

Given current FinTech valuations, Wise is believed to be worth more than the $5B valuation at which it sold a stake last summer. According to Sky News, one investor claims that it could be worth as much as twice that sum.

Source: Sky News, Income, Investopia

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