The positive financial results at TransferWise are considered a consequence of the payback of the startup expansion strategy. Compared to other UK fintech startups, the company has barely felt the impact of COVID-19.
UK-based fintech startup TransferWise reported a 2-fold increase in earnings in fiscal 2020, which ended at the end of March. In a report released today, the company says its pre-tax profit rose to £ 20.4 million (almost $ 26 million). For comparison: in the 2019 financial year, this figure was at the level of £ 10.1 million.
At the same time, the revenue of the startup founded in 2011 also grew by 70% to £ 302.6 million ($ 385.2 million). It is worth noting that the company, which only made profit in 2017, has been breaking even for the fourth year in a row.
According to TransferWise’s own data, its services are used by more than 8 million customers, who keep more than £ 1.97 billion (more than $ 2.5 billion) in the startup’s accounts. In fiscal 2020, the company processed £ 67bn ($ 85.3bn) of transactions, £ 42bn of which was in cross-border payments.
Source: TransferWise Report
TransferWise’s results contrast interestingly with those of other UK fintech companies. For example, Nicolas Storonsky’s startup Revolut reported a threefold increase in losses in the past financial year – from £ 32 million to £ 107.4 million ($ 136.7 million). Starling Bank also reported a pre-tax loss of £ 53.6 million ($ 68.2 million), nearly double the previous year’s loss.
Monzo’s neobank stated that “there is significant uncertainty that casts doubt on the company’s ability to continue as a going concern.” In the past fiscal year, the company recorded a loss before tax of £ 115.4 million ($ 146.9 million).
TransferWise CEO and co-founder Christo Karman noted that the positive results amid the COVID-19 pandemic are the result of the payback of the startup’s expansion strategy.
“In this  fiscal year, we have continued to develop in three directions. First, in the markets we support, we’ve increased the pace at which consumers are switching from traditional banks and brokers to TransferWise services. Secondly, we expanded our financial services reach by launching services in the UAE, Malaysia and for business clients in Japan. Finally, we have developed a range of products for new customer segments. This is, for example, TransferWise for Banks, ”said Karman.
As a reminder, TransferWise is one of the most expensive European fintech unicorns. At the end of July, the company closed a deal for the secondary sale of shares for $ 319 million. Investors estimated its value at $ 5.5 billion.