Khanoisseur 🐶🤦🏻‍♂️🌎 @Khanoisseur Nonpartisan fact-checks + analysis of news (+ 🐶 pics). *Turn notifications on* (Podcast coming). Stuff for @Google @Twitter @Uber @Facebook @Tesla May. 23, 2019 1 min read

1. Founded by Skype’s first employee, London-based Fintech startup TransferWise (supports 750+ currency routes globally; its customers transfer $4 billion/month) ditched the IPO route to conduct a $292 million all-secondary sale, valuing it at $3.5 billion. 

2. Transferwise routes payments not by transferring the sender’s money directly to the recepient as in the case of SWIFT, but by matching the amounts with other TransferWise’s users sending money the other way. It then uses these pools of funds to pay out via local bank transfer.

3. Both founders of Transferwise are from Estonia. Taavet was first employee at Skype, and he got paid in euros. But he lived in London and needed pounds to pay the bills. Kristo worked lived in London, got paid in pounds but his mortgage in Estonia required payment in euros.

4. Every month Taavet and Kristo move the money the old-fashioned way, which wasted time and money. So they invented a beautifully simple workaround (that became a multimillion dollar business) in 2010 with the goal of making international money transfers cheap, fair and simple.

5. Each month they looked up actual exchange rate. Taavet put his euros in Kristo’s Estonian bank account and Kristo topped up Taavet’s UK bank account using pounds, both avoiding bad exchange rates. “There must be others in this situation,” they thought.

6. Like Uber, Airbnb and others whose founders set out to solve a problem they/families/friends were experiencing, Transferwise too set out to solve a problem that bigger players either kept in their blindspots or didn’t dare to tackle. This is how you become a tech unicorn 🦄.

7. The other important point about the Transferwise story is how companies that hire smart people - its founders came from Skype and Deloitte - can incubate whole new business models that can help improve people’s lives around the world.

8. And like many high growth startups (in US and elsewhere) in recent years, Transferwise relies on Amazon for hosting its platform, and on tools created by likes of Google, Sun, LinkedIn, Oracle and later open-sourced - this is the beauty of the global tech ecosystem today.

You can follow @Khanoisseur.


Tip: mention @threader_app on a Twitter thread with the keyword “compile” to get a link to it.

Enjoy Threader? Sign up.

Threader is an independent project created by only two developers. The site gets 500,000+ visits a month and our iOS Twitter client was featured as an App of the Day by Apple. Running this space is expensive and time consuming. If you find Threader useful, please consider supporting us to make it a sustainable project.