Shares in London-listed fintech company Wise experienced a marked decline following a trading update that analysts deemed disappointing, particularly in light of its upcoming move to a primary US listing.
The £12 billion money transfer firm reported a 24 per cent increase in quarterly cross-border volume, reaching £41.2 billion, for the three months ending in June. Customer holdings also saw a significant rise, growing by 31 per cent to £22.9 billion. The company stated that its active customer base expanded by 17 per cent, now standing at 9.8 million. Underlying income was up 11 per cent, reaching £362 million.
However, a key concern for analysts was the fall in Wise’s cross-border “take rate,” which decreased by 12 basis points in the first six months of the year. The firm attributed this to a reduction in its average price.
Kristo Käärmann, co-founder and CEO of Wise, said: “We have had a strong start to our financial year, progressing on our journey to moving trillions with more people and businesses around the world using Wise.”
Wise shares fell by as much as nine per cent to 1033 pence in early London trading. The stock is now down three per cent since the beginning of the year.
Philip Atkinson, an analyst at London firm, Third Bridge, commented: “Crossborder volume, take-rate, and card & other revenue all came in below consensus estimations this morning. From what our experts have been saying, take-rate reduction and slower card growth shouldn’t come as a surprise. The consensus miss on overall volume, despite a beat on the two line items, personal and business, implies that the market could be factoring in platforms volume, with the overall miss potentially showing a slower ramp to this long-term revenue driver than previously expected.”
Last month, the fintech delivered a significant blow to the London Stock Exchange by announcing its intention to shift its primary listing to New York. This move is one of the largest departures in recent months and has reignited concerns about the vitality of the UK’s capital markets.
Lee Edwards, VP at analytics platform Amplitude, which is headquartered in the USA but has a London office, stated that Wise’s departure was the “latest sign that the UK urgently needs to rethink how it supports and scales its tech ecosystem. London has incredible talent and ambition, but too often lacks the depth of capital markets, investor appetite, and scale-up support that founders find in New York. Without a competitive public markets environment and the right incentives to keep innovation here, we risk becoming a stepping stone rather than a destination.”
Regarding the US listing, Mr Käärmann confirmed: “We believe the addition of a primary US listing will help us accelerate our journey to becoming ‘the’ network for the world’s money, and ensure our mission and the interests of our customers and Owners remain deeply aligned over the long term.”
Image source: Wise
