Seedcamp, an early backer of TransferWise, has sold part of its stake in the London-based money transfer startup, in a Secondary dealing that may well represent one of the best European seed exits in recent years that wasn’t an acquisition or IPO.
TransferWise was most recently valued by investors, which also include Baillie Gifford, Andreessen Horowitz and Richard Branson, at $1.1 billion, making the company a bona-fide ‘unicorn’.
TechCrunch understands that Seedcamp’s partial exit sees 80 per cent of its second fund of €5 million returned to investors. That’s a very decent bit of business whichever way you slice it.
It’s also worth noting that, despite a partial sale, Seedcamp has elected to keep the majority of its shares in TransferWise and remains bullish regarding the startup’s future prospects.
“Seedcamp sold a small minority of our stake in Transferwise,” Seedcamp co-founder and Partner Reshma Sohoni tells TechCrunch, when asked to comment. “We are holding on to the large majority of our stake because we, like the founders, believe they are just getting started. This is a company that’s barely 6 years old and is a unicorn”.Late last week, Sky News reported that Silicon Valley VC Andreessen Horowitz had increased its stake in TransferWise by purchasing a “chunk” of shares from unnamed angel investors.
I’ve been unable to confirm that Andreessen is the buyer in relation to Seedcamp’s partial exit, although it seems extremely likely. Sohoni declined to comment on the specifics, only to say that it was “an internal private transaction”.
“We actively wanted to sell part of our stake, so we worked on this over time but completed the transaction end of 2016,” she adds. “There are three ways to get a billion dollar exit – M&A, IPO, Secondary. We want to show that in Europe the Secondary, which is the least talked about, is a very viable way to do exactly that”.
Asked why Seedcamp decided to sell a portion of its stake in TransferWise, Sohoni reiterated Seedcamp’s commitment to the company “for the long-term” but says the pre-seed and seed investor also wanted to strike a “win-win balance” for investors. She also underlined the fact that the deal returns 80 per cent of a fund that’s barely 5 years old and yet Seedcamp still gets to keep hold of a large part of its stake in TransferWise.
“As the first seed fund in Europe (set up back when it wasn’t really a thing), made up mostly of Angels and VCs, we wanted to show that you can have unicorn exits and bring liquidity to a highly illiquid stage of investing. Getting money back into the hands of our Angels and VCs so fast should inspire them to take even bigger risks. 100 million or 200 million exits are great but billion dollar and 10 billion dollar exits just became possible!”