TransferWise co-founders Taavet Hinrikus and Kristo Kaarmann.
Financial technology firm TransferWise booked a profit for the third year in a row, a rare show of growth for an industry littered with start-ups that have struggled to break even.
The London-based company said on Wednesday that its net profit after tax climbed to £10.3 million ($12.8 million) in the fiscal year ending March 2019, up 66% from the previous year. Revenues at the firm rose about 53% to £179 million.
TransferWise, which was recently valued at $3.5 billion, has shaken up the money transfer industry with an online platform that it says allows people to send money abroad at a fraction of the cost offered by banks and the likes of Western Union and MoneyGram.
It was set up in 2011 by Estonian friends Taavet Hinrikus and Kristo Kaarmann with the stated aim of making foreign exchange fees more transparent. Kaarmann, TransferWise’s CEO, said the firm was among a “rare breed of unicorns” that have managed to create a profitable business.
“This is indeed rare, but it is very important for us internally,” Kaarmann told CNBC in a phone interview. “We really only know if the product works once the product works on its own and doesn’t need any extra cash to support it.”
Many other fintech unicorns — private companies worth $1 billion or more — have so far failed to generate an annual profit. Monzo’s losses climbed to £47.2 million in the fiscal year ending February 2019, while Revolut last year reported a £14.8 million for 2017.
TransferWise is backed by a number of high-profile investors, including British billionaire Richard Branson, Silicon Valley venture capital firm Andreessen Horowitz and Valar Ventures, the venture fund co-founded by Peter Thiel. Now valued at $3.5 billion after a $292 million secondary share sale, the company is one of the most valuable fintechs in Europe.
It says it now has 6 million customers globally and processes £4 billion in transactions each month. Over the past few years, the firm has added new offerings into its platform including a multi-currency debit card and a foreign exchange service for businesses.
TransferWise said its customers hold over £1 billion with its multi-currency account and the firm is signing up 10,000 businesses a month. It’s also struck deals with banks including France’s Groupe BPCE as well as fintech rivals Monzo and N26, which have integrated TransferWise’s software into their platforms.
Earlier this year, the company opened a new office in Brussels and said it would apply for a money transfer license to continue operating in the EU in the event of a no-deal Brexit.
Kaarmann said TransferWise has been preparing in other ways, for example by letting European employees working in the U.K. apply to continue living in the country through an app that’s only available on Android devices. The firm employs 1,700 people globally and plans to hire 750 more over the next year.