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Fintech start-up TransferWise reports second year of profit, revenue almost doubles

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Fintech start-up TransferWise reports second year of profit, revenue almost doubles
Kristo Kaarmann, Co-Founder & CEO, TransferWise, on Centre Stage during day one of MoneyConf 2018 at the RDS Arena in Dublin. (Photo By Eóin Noonan/Sportsfile via Getty Images)

TransferWise, one of Europe’s largest financial technology (fintech) start-ups, said Monday it was profitable for the second year in a row.

 

The London-headquartered money transfer firm reported an annual post-tax net profit of £6.2 million ($8 million) for the fiscal year ending March 2018.

Annual revenue nearly doubled to £117 million during the period, from £66 million the previous year, TransferWise said. Operating profit came in at £9.5 million following a loss of £519,000 last year.

The company’s accounts entered into the black for the first time in March 2017, six years after the firm was founded by Estonian entrepreneurs Taavet Hinrikus and Kristo Kaarman.

“We’ve proven that fintech can offer consumers an unbelievable experience at a low price, all whilst creating a solid business that can be trusted long-term,” Kaarman, TransferWise’s chief executive, said in a statement Monday.

“Looking forward, sustained growth and our healthy financial position means we can continue to drive down costs whilst investing in developing our product.”

TransferWise is counted among Europe’s “unicorn” start-ups — firms valued at $1 billion or more — with a reported valuation of $1.6 billion.

It has raised a total of $397 million since it was founded in 2011. Backers include asset management giant Old Mutual, Silicon Valley venture capital firms Institutional Venture Partners and Andreessen Horowitz, and British billionaire Richard Branson.

The firm says that £3 billion worth of transactions are moved around each month on the TransferWise app by its more than 4 million users.

The company makes money through fees charged on international transfers, which it boasts are up to eight times lower than those charged by banks.

Last year, it introduced its traveler-friendly borderless account to European customers, which lets users hold over 40 currencies and switch between currencies instantly. TransferWise plans to roll out the product to U.S. users later this year.

And in July, TransferWise tied up with French bank Groupe BPCE, in its first major bank partnership, to provide the lender’s customers access to its money transfer service. It has also struck deals with rival fintech firms Monzo and N26.

Monday’s earnings news could signal a changing landscape for fintech firms like TransferWise when it comes to profitability. Many start-ups in the sector have struggled to break even due to the cost of investing in their products and scaling their business while offering cheaper services than large banks.

Rival currency exchange and banking app Revolut for instance said earlier this year that it had broken even for the first time in December 2017. Meanwhile, another competitor, WorldRemit, expects to turn a profit by 2019.

The money transfer industry is a competitive one, with established giants like Western Union and MoneyGram, both of which have been investing heavily in the digital segments of their businesses.

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Oil extends slide from 7 percent slump the day before as outlook darkens

SINGAPORE (Reuters) – Oil markets slipped again on Wednesday, extending losses from a 7 percent plunge the previous session as surging supply and the specter of faltering demand scared off investors. FILE PHOTO: Oil pours out of a spout from Edwin Drake’s original 1859 well that launched the modern petroleum industry at the Drake Well…

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Oil extends slide from 7 percent slump the day before as outlook darkens

SINGAPORE (Reuters) – Oil markets slipped again on Wednesday, extending losses from a 7 percent plunge the previous session as surging supply and the specter of faltering demand scared off investors.

FILE PHOTO: Oil pours out of a spout from Edwin Drake’s original 1859 well that launched the modern petroleum industry at the Drake Well Museum and Park in Titusville, Pennsylvania U.S., October 5, 2017. REUTERS/Brendan McDermid/File Photo

U.S. West Texas Intermediate (WTI) crude oil futures were at $55.50 per barrel at 0514 GMT, down 19 cents from their last settlement.

International benchmark Brent crude oil futures LCOc1 were down 22 cents at $65.25 per barrel.

Crude oil has lost over a quarter of its value since early October in what has become one of the biggest declines since prices collapsed in 2014.

The slump in spot prices has turned the entire forward curve for crude oil upside down.

Spot prices in September were significantly higher than those for later delivery, a structure known as backwardation that implies a tight market as it is unattractive to put oil into storage.

By mid-November, the curve had flipped into contango, when crude prices for immediate delivery are cheaper than those for later dispatch. That implies an oversupplied market as it makes it attractive to store oil for later sale.

Oil markets are being pressured from two sides: a surge in supply and increasing concerns about an economic slowdown.

U.S. crude oil output from its seven major shale basins is expected to hit a record of 7.94 million barrels per day (bpd) in December, the U.S. Department of Energy’s Energy Information Administration (EIA) said on Tuesday.

That surge in onshore output has helped overall U.S. crude production C-OUT-T-EIA hit a record 11.6 million bpd, making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia.

Most analysts expect U.S. output to climb above 12 million bpd within the first half of 2019.

“This will, in our view, cap any upside above $85 per barrel (for oil prices),” said Jon Andersson, head of commodities at Vontobel Asset Management.

The surge in U.S. production is contributing to rising stockpiles.

U.S. crude stocks climbed by 7.8 million barrels in the week ending Nov. 2 to 432 million as refineries cut output, data from industry group the American Petroleum Institute showed on Tuesday.

The producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) has been watching the jump in supply and price slump with concern.

OPEC has been making increasingly frequent public statements that it would start withholding crude in 2019 to tighten supply and prop up prices.

“OPEC and Russia are under pressure to reduce current production levels, which is a decision that we expect to be taken at the next OPEC meeting on Dec. 6,” said Andersson.

That puts OPEC on a collision course with U.S. President Donald Trump, who publicly supports low oil prices and who has called on OPEC not to cut production.

Reporting by Henning Gloystein; Editing by Joseph Radford

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1.1 million Marylanders expected to travel for Thanksgiving

More than 1.1 million Marylanders will travel for the Thanksgiving holiday weekend, the most in more than a dozen years, according to AAA Mid-Atlantic projections.It’s the fourth straight year the auto club has projected Thanksgiving travel volumes of more than 1 million people in Maryland. Roughly one in every six state residents are expected to…

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More than 1.1 million Marylanders will travel for the Thanksgiving holiday weekend, the most in more than a dozen years, according to AAA Mid-Atlantic projections.

It’s the fourth straight year the auto club has projected Thanksgiving travel volumes of more than 1 million people in Maryland. Roughly one in every six state residents are expected to go away between Wednesday and Sunday of the holiday weekend.

“As the economy continues to grow, along with wages, disposable income and household wealth, many Marylanders are feeling enough confidence to not hold back on spending, which is evident by this year’s robust holiday travel forecast,” AAA Mid-Atlantic spokeswoman Ragina Cooper Averella said in a statement.

Most will drive, and low gas prices could be playing a role in their decision, she said.

After hitting a high of $2.99 per gallon of regular unleaded gasoline over Memorial Day weekend, the average price at the pump in Maryland had fallen to $2.37 as of Tuesday, according to AAA.

Prices have fallen 30 cents in the last month and 7 cents in the past week. The current average is within 5 cents of the lowest price this year, set March 9.

“Prices could drop even lower, especially if there is a surge in gasoline production after refiners fully restart units from the fall maintenance season, and oil prices continue to remain stable,” Averella said.

If possible, the 91 percent of travelers who are driving to their destinations should try to avoid the early evening commute period next week, which is expected to be the most congested, according to AAA, which worked with INRIX, a global mobility analytics company, on its projections. Sunday is expected to be busy, too.

To avoid the gridlock, Troy Brad, 30, of Glen Burnie, plans to leave for Virginia before sunrise Wednesday, between 5 and 6 a.m.

He’ll spend Thanksgiving with his children and his mother’s and sister’s households, about a dozen family members in total, at a time-share in Massanutten, Va., they bought this summer.

“The whole wolf pack,” Brad called his crew. “It’s going to be a nice family event.”

Kristina Turner will be one of more than 82,000 Marylanders expected to fly for Thanksgiving — although she is taking a little longer than a holiday weekend for her trip.

The 24-year-old, who lives in Baltimore’s Mount Vernon neighborhood, is headed to Portugal Tuesday for a three-week trip to Barcelona, Paris, London and Brussels with her boyfriend, Sergeant First Class Marion Brawley, during his time off from his deployment in Afghanistan, she said.

Turner said she is more excited to see Brawley than she is worried about long wait times at Baltimore/Washington International Thurgood Marshall Airport.

“It’s overdue!” she said.

Nearly 22,000 are expected to travel by train, bus, boat or other mode of transportation, which is roughly flat compared with last year, AAA said.

cmcampbell@baltsun.com

twitter.com/cmcampbell6

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Business

Japan’s Economy Shrank in July-September as Trade Falls

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