A million pounds isn’t cool, you know what’s cool?
In the midst of reports that Facebook could be about to get into financial services, one of the startups it’s rumoured to have talked to, the European P2P money transfer service TransferWise, has hit a major milestone today: Its platform has processed £1 billion of customers’ money, an eight-fold increase — £125m to £1bn — since May last year when the company raised a $6 million series A round led by Peter Thiel’s Valar Ventures.
And whilst a better metric would be actual revenue, this undoubtedly demonstrates significant traction for the London-based company. It’s also more evidence of the money transfer space heating up right now, with a plethora of startups, especially in Europe, aiming to disrupt the banks and legacy players such as Western Union — hence Facebook’s interest.
Just last month, Dublin-based CurrencyFair hit the $1 billion money transfer mark — that’s dollars not pounds — claiming to be the leading P2P money transfer service, although presumably TransferWise would now dispute this. And in the same month, the UK’s Azimo — which the FT reported was a potential acqui-hire target for Facebook — raised a $10 million series A round, and WorldRemit received a $40 million investment from Accel Partners.
In a call, TransferWise Executive Chairman and co-founder Taavet Hinrikus refused to be drawn into speculation regarding whether or not it had been approached by Facebook, except to toe the line that, were the social network to get into the business of money transfers, it would be validation of the need to bring greater transparency to financial services.
That’s in reference to TransferWise’s modus operandi: to expose the hidden fees charged by the banks when sending money abroad. By employing a P2P model, the startup’s platform is able to undercut incumbent players — it claims to have already saved customers over £45 million.
“If someone as big as Facebook comes into the space, then I think that’s only going to be beneficial to everyone,” he says.
Hinrikus was willing to wax lyrical on the opportunity as a whole, however, stressing that TransferWise was just getting started. “If I look at the world right now… money transfer is such a humongous market. Even though we have transferred a billion pounds so far, we’re just touching the beginning of it,” he says. “We’re focused on building and growing and we’re having a ton of fun every day”.
That’s likely coded talk for “it’s far too early to think about selling” and another way to pour cold water on any TransferWise/Facebook speculation. And whilst founders speak in those terms all the time, judging by how passionante Hinrikus is when talking about the opportunity and startup life as a whole, I’m inclined to take him at his word.
To coincide with that £1 billion milestone, the company is launching an Android app today, adding to its existing iOS offering. Hinrikus says mobile offers another — and different — opportunity and that TransferWise is thinking about “what more can you do on mobile?”.
“Given that the phone is something you have in your pocket all the time, there is much more that money on mobile should mean to people and ways they can be in control,” he says. “It caters for a different usage experience.”
Finally I asked Hinrikus — who recently invested in Bitcoin exchange Coinfloor — if and when TransferWise will support the crypto-currency. “When you can do something useful with Bitcoin,” he says, noting that the engineer in him is still very excited by the technology, but that it’s a technology “that doesn’t really have an application yet.”
“I’d love someone to build a killer application for Bitcoin, and once that happens we will surely support it,” adds Hinrikus.