TransferWise just raised $26 million

TransferWise on Wednesday announced it had raised $26 million from Scottish asset manager Baillie Gifford.

The online international money transfer service has been rumoured to be raising money for months, with Sky News reporting London-headquartered TransferWise was in talks with Baillie Gifford back in February.

However, the final round is much smaller than previously rumoured. Sky pegged the round at $70 million in its February and sources also suggested to BI that the round was set to be around that level.

TechCrunch reports that the latest funding round values TransferWise at $1.1 billion, marginally more than the $1 billion valuation it is said to have achieved in its $58 million funding round last January.

TransferWise declined to comment on Sky's $70 million figure and the $1.1 billion valuation figure when contacted by BI.

Peter Singlehurst from Baillie Gifford says in an emailed statement: "We're delighted to have invested in TransferWise. Its success to date shows how badly served consumers have been in the past and the real need for what TransferWise offers. The company's plans for the future are very exciting and the founders have built up an awesome team to deliver them."

Taavet Hinrikus, CEO and cofounder of TransferWise, says in an emailed statement: "After just five years, we've seen how much TransferWise can help people who need to move money internationally. People are now moving £500 million every month on TransferWise, that means they're saving themselves over £22 million.

"We want to bring TransferWise to everyone in the world who needs it. It's great to have Baillie Gifford on board to help us grow even faster."

TransferWise plans to use the funds to expand its currency routes. It currently lets users send money along 600 currency routes globally and is planning to launch another 150 this year.

As well as Baillie Gifford, existing investors in London-based TransferWise include Silicon Valley venture capital firm Andreessen Horowitz, Peter Thiel's Valar Ventures, Sir Richard Branson, Index Ventures, and Seedcamp. To date it has raised $91 million.

TransferWise was founded in 2011 as a peer-to-peer money transfer platform. The platform would match demand of people wanting to send money one way with those wanting to send it the other way, saving money by not actually converting the money. As it has grown it has taken on more elements of a traditional FX broker, using liquidity providers when there's not enough demand.

As it has grown it has taken on more elements of a traditional FX broker, using liquidity providers when there's not enough demand. It now sells itself on price, promising cheaper transfer costs than banks and high street providers thanks to lower overhead costs (there's no branch network to maintain).