TransferWise (TRANSFERWISE), a cross-border money transfer startup, just raised an enormous chunk of change to help expand in Latin America and Asia, and to grow its “Borderless accounts” service for businesses.
The London-based company, which has been profitable since early this year, announced Tuesday it raised $280 million in a Series E round led by the venture capital firm IVP and the asset manager Old Mutual Global Investors.
TransferWise, which was valued at $1.5 billion in August, has now raised a total of $397 million and counts high profile names like Andreesen Horowitz and Richard Branson among its investors.
Like other payments startups, TransferWise found a niche helping people move money across borders without expensive and cumbersome wire transfers.
The company started out by matching individuals in one country with counterparts in another who want to move cash in the opposite direction, and charging less than 1% for the transaction. TransferWise has since added business customers with its “Borderless accounts”—a service that lets companies maintain balances in multiple companies even if they don’t step foot there.
“Around the world small and medium business are similarly screwed. They’re being simultaneously underserved and overcharged by the banks,” TransferWise co-founder Taavet Hinrikus told Fortune.
He added that the company now has 10% of the international transfer market in the U.K., and expects that to rise to 20%, and that it’s “earlier in the penetration curve” in the U.S.
According to Hinrikus, it takes an eternity for banks to adopt a new technology and that TransferWise will keep following its preferred approach, which is to work with local payment networks in different countries.
TransferWise’s massive funding round comes days after Seattle-based Remitly, another money transfer service, raised $115 million to expand its remittance business. Other competitors include Azimo and PayPal-owned Xoom.
While TransferWise’s valuation rate makes it a so-called unicorn, it is one of those that’s in no rush to go public. Hinrikus told Fortune his best estimate is that an IPO for the company is three or four years away.
Here are a few more details from TransferWise drawn from Thursday’s announcement:
TransferWise now serves over 2 million customers and offers 750 currency routes, with further expansion into Asia planned for the next 12 months, including services from India and to Nepal. The company already has hundreds of thousands of customers in APAC, having announced a regional hub office in Singapore this year, with satellite offices in Tokyo and Sydney. Today TransferWise moves $1bn for its customers every month, saving them $1.5m a day, compared to if they had used their bank for the same transaction.