Transferwise starts to reap rewards of pared-down model

Money-sending business Transferwise, one of the country’s fastest-growing fintech firms, is finally profitable, six years after it was founded.

Transferwise was founded by two Estonians, Taavet Hinrikus and Kristo Kaarmann, here in 2011 and has been held up as an example of how London attracts tech talent from all over Europe.

The firm offers customers a way to transfer money overseas at a fraction of normal rates through a peer-to-peer system from which “hidden fees” have been abolished (the firm held a Hallowe’en march to celebrate their demise). Its clients transfer more than £1 billion each month.

Transferwise says it will make an annual pre-tax loss of £17.4 million for the year ended in March, but says it’s been profitable since the start of 2017.

High-profile investors in the firm include Sir Richard Branson, Facebook investor Peter Thiel and Betfair co-founder David Yu.

The business, which has 700 staff and more than a million customers, is valued at $1.1 billion (£852 million), placing it in the “unicorn” category — start-ups worth at least $1 billion. The profitability of tech companies versus their valuations has been questioned by the City.

Transferwise recently called for looser regulation to help the fintech sector.