Not only does the low-cost international money transfer startup Transferwise have some very cheeky “anti-bank” TV ads, it now has the backing of super-investor Peter Thiel and super-entrepreneur Sir Richard Branson behind it.
Thiel’s Valar Ventures, Index Ventures, Branson, and some other high profile tech investors have invested $25 million in London-based Transferwise.
The new investment marks Transferwise’s second round of funding, with Branson joining as a new investor. The company took a $1.3 million first round of funding, led by PayPal founder Max Levchin, among others.
Transferwise says it will use the new money to raise awareness of the hidden fees applied to overseas money transfers, among other things. Banks and brokers typically hide transfer fees within the exchange rate they offer, the company says. TransferWise believes that all costs should be presented upfront and only the mid-market exchange rate should be used to process transactions.
“We’re going to use this money to lead the charge against hidden bank fees and expose the problem to a wider audience,” Taavet Hinrikus, cofounder of TransferWise, said in an official statement. “It’s outrageous that they can get away with advertising that claims their transfers are ‘fee-free’ despite often taking up to 5 percent of the money sent through the exchange rate.”
The trick behind Transferwise is the use of cheap, peer-to-peer technology to perform less-expensive transfers.
Branson had this to say in an official statement: “I’m delighted to be investing in such an innovative company as Transferwise. Financial services such as foreign exchange have been ripe for disruption for decades, and it’s great to see TransferWise bring transparency to the market.”
Besides Valar Ventures and Index Ventures, other existing investors participating in the round included IA Ventures, TAG (Robin Klein and Saul Klein), and Kima Ventures.