Wise valued at $ 11 billion in record direct London listing

LONDON, July 7 (Reuters) – Shares of fintech company Wise on Wednesday ended up 10% on their first day of listing on London’s largest tech listing, which could pave the way for further trading. other companies seeking to go public without the assistance of underwriters.

The UK government has been keen to push tech groups to register in the country and its financial watchdog earlier this week presented proposals to facilitate their registration to help London compete with New York and the EU after Brexit. Read more

The wireline shares opened at 800 pence – following an auction process in previous hours, which saw a price range listed of 750 to 820 pence as the group completed the first direct listing on the London Stock Exchange (LSE).

They closed at 880 pence, valuing the company at 8.75 billion pounds ($ 11 billion) and becoming London’s largest tech company by market cap, well above market expectations of 6-7. billion dollars at the start of the year.

The good result caps a record year for London listings and could also encourage other fast-growing UK companies in the FinTech sector, a dozen investors, entrepreneurs and experts told Reuters. Read more

“The start of the trade smoothly should help London’s efforts to maintain its reputation as a Fin Tech hub as it struggles to attract fast-growing companies keen to join,” said Susannah Streeter, analyst at Hargreaves Lansdowne.

“But now more and more companies might see direct listings as a good alternative to traditional IPOs which are more expensive, requiring the provision of expensive services from investment banks.”

FINTECH UNICORNS

The cross-border payments company, one of Britain’s best-known fintech unicorns, last month launched direct listing, which allows listing without a public offering of shares.

These lists have grown in popularity among technology companies in the United States such as Coinbase (COIN.O), Roblox (RBLX.N), and Spotify (SPOT.N).

Several tech companies including Deliveroo (ROO.L), Trustpilot (TRST.L) and Moonpig (MOONM.L) have already been listed in London this year and have helped push initial public offerings (IPOs) to an all-time high.

“It certainly helps to have well-known brands with strong successes in domestic markets. They are rare until now, but the more commercialized they are, the better, ”said Daniel Turgel, partner in M&A and corporate practice at White & Case.

Wise doesn’t wire money the same way its peers like Western Union do, but instead holds balances in countries on popular currency routes to avoid high fees, said Dan Thomas, analyst at Third Bridge.

“Wise has a clear advantage over its peers like Western Union and Moneygram because the origination is 100% digital and they don’t need to maintain a network of physical locations to pay out money,” he said. declared.

($ 1 = 0.7260 lb)

Reporting by Abhinav Ramnarayan; Editing by David Clarke, Jason Neely and Emelia Sithole-Matarise

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