[LONDON] British fintech firm Wise said on Thursday it plans to go public with one of the first direct listings on the London Stock Exchange.

The London-based payments app said it is opting to list without raising any funds, in a boost to the British government's aspirations to attract more technology firms to its capital markets.

It has been a volatile year so far for stock market listings in Europe, with at least two initial public offerings (IPO) cancelled in recent weeks.

"Wise is used to challenging convention, and this listing is no exception. A direct listing allows us a cheaper and more transparent way to broaden Wise's ownership, aligned with our mission," its co-founder and CEO Kristo Käärmann said.

The listing could value Wise, formerly known as TransferWise, at anywhere between US$6 billion to US$7 billion, sources told Reuters, in what would be one of the biggest floats this year.

Wise said in a statement that it has been profitable since 2017, with a 54 per cent annual revenue growth rate over the last three years, reaching £421 million (S$787.8 million) in overall sales in 2021.

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In 2021, the payments app moved £54.4 billion across borders for six million customers.

The listing is expected to be finalised on July 5, with Wise aiming for a freefloat of at least 25 per cent, a bookrunner said.

In London, IPOs from Deliveroo and Alphawave both tanked on their stock market debuts, and are trading well below their listing prices.

DUAL-CLASS

Wise was founded in 2010 by Mr Käärmann, a former consultant at PwC and Deloitte, and fellow Estonian Taavet Hinrikus, who was previously director of strategy at Skype.

They have opted for a dual class share structure which will allow them to retain voting control while bringing customers and "other like-minded investors" into its shareholder base.

"We are here for a long term mission. For the transition period of five years we are setting up this structure so we can focus on this mission," Mr Käärmann said.

This structure may reignite debate among investors in Britain earlier this year over Deliveroo's listing.

Dual-class share structures are a common feature of listed technology companies in the United States but are frowned on by some British investors as they can give executives outsized influence on shareholder votes relative to their stake sizes.

At present, London-listed companies cannot have a dual-class structure and gain access to the lucrative FTSE indices at the same time, though that is set to change if recommendations from a recent listings review are put in place.

Goldman Sachs, Morgan Stanley and Barclays are lead financial advisers on the deal, with Citigroup acting as co-adviser.

REUTERS

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