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Why startup unicorns go public
Startup IPOs overtake unicorns, the first startup IPO in London, and more...
SearchVentures & Olivia Bucherer-Ezer
October 02, 2024
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European IPOs are gaining momentum
VC-backed IPOs in Europe have surpassed the value of unicorns for the first time since 2018, despite more unicorn financing rounds.
Why are IPOs gaining momentum?
This Week’s Trends
IPOs overtake Unicorns
The $11bn fintech IPO by Wise
Denmark’s first defence fund and more
Read Time 4 minutes
The Startup Trend
IPOs vs Unicorns
VC-backed IPOs in Europe have surpassed unicorns in value for the first time since 2018, with a 4133% increase from 2023. This is despite an increase in the number of unicorn financing rounds.
> Late-stage startups like Puig that raised capital in 2021-22 have reached a level of maturity where going public is a viable option to access larger capital pools.
> Despite the recent downturn, favorable market conditions, including low interest rates and high liquidity, make it easier for European startups to go public
💡This is despite the increase in startup private equity buyouts across Europe as highlighted in a previous publication.
Startup feature
How Wise is beating traditional banks
Wise, the UK-based fintech startup known for its affordable international money transfer service, is simplifying cross-border payments for over 10 million customers. After making history in 2021 as the first startup on the London Stock Exchange to go public through a direct listing, Wise is now valued at over $11 billion.
The start and growth of Wise
Founded in 2010 as TransferWise by Kristo Käärmann and Taavet Hinrikus, Wise emerged from their frustration with high transfer fees between the UK and Estonia. By using real exchange rates and eliminating hidden costs, the startup aimed to simplify international transfers by making them more transparent for its users.
“When we started Wise, we knew the problem we were tackling was huge and that it wouldn’t be easy to solve.”
When Wise launched in London in 2011, their product was a simple peer-to-peer currency exchange platform, allowing users to see the price of sending money abroad in real time without hidden fees.
“Our goal was to make international banking fair, easy, and accessible. We didn’t really know how, so we had to figure it out one step at a time.”
Partnering with local banks in different countries, Wise offered lower fees than traditional banks, leveraging the best rates available. This transparency quickly gained attention in the UK, leading to rapid expansion across Europe and the U.S. Within two years, Wise had processed over $1 billion in transfers and attracted more than 50,000 users to its platform.
Deciding to go public
After bootstrapping the start of Wise, the founders decided to raise over $6 million in a 2013 Series A round, followed by $25 million in 2014 from prominent investors like Richard Branson and Andreessen Horowitz, in order to expand their product quickly to more countries.
“After bootstrapping our start, we finally decided to accept investments from some of the investors. Going public seemed like the next logical step.”
Achieving a valuation of $5 billion from VC and private investors, Wise decided to go public in 2021 and was the first startup to do a direct listing on the London Stock Exchange, bypassing the costly process of a traditional IPO.
The listing valued Wise at $11 billion, making it one of London’s largest tech debuts and highlights how venture-backed startups are challenging traditional industries while paving the shift towards public markets.
“We took advantage of a cheaper and more transparent way to broaden Wise’s ownership and establish legitimacy as a fintech.”
Written by Olivia Bucherer-Ezer
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