Abstract

In 2010, Wise (formerly Transferwise) was founded by two friends Taavet Hinrikus and Kristo Käärmann, with the objective of reducing the transfer fees incurred by millions of expats, small businesses, and holidaymakers while exchanging their money on a regular basis. The company also used a unique business model that focused on transferring money within the country through domestic accounts. Wise offered a multi-currency account, a debit card, and a business account to meet the needs of its customers. The company generated revenue of £421 million in 2021 by serving eight million customers across the world. On July 7, 2021, the company was listed on the London Stock Exchange (LSE) through direct listing and its valuation reached £8.75 billion (US$ 12 billion). This case details the concept of direct listing and its procedure. It provides the scope to discuss the difference between direct listing and the traditional Initial Public Offer (IPO) and other related concepts.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the traditional methods of IPO
• Examine the various motives for companies opting for direct listing
• Understand the nature and mechanism of direct listing
• Understand the risks and rewards associated with the method of direct listing

Keywords

Wise; OwnWise; Class A shares; Class B shares; Premium listing; Standard Listing; Direct listing; Cash pick up; Cash home delivery; Peer-to-peer lending; P2P; Wise’s Business Model; Primary Markets; Public Issue; IPO