Product details

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Abstract

Banks once held a near monopoly in transferring money around the world and charged customers a high transfer fee. But ever since the 2008 financial crisis, their reputations took 'an almighty battering'. A growing number of technology-focused start-ups have taken advantage of this fact with 'intent on getting a slice of the action'. Cost was the battleground in which technology acted as the weapon in this huge business. TransferWise was one such player building a burgeoning business by undercutting banks on the price of international money transfers which reached great heights within a short span of time since its inception in 2011. The Estonian company, which had 1,200 employees, brought in USD151 million in revenue during 2017-18, showing a 75% year-over-year increase. Its net profit reached USD8 million during the same period. Experts wondered if the start-up would 'keep scaling amidst heightened trade tensions, the unfortunate rise of xenophobia and capital controls'? They also questioned whether it would continue to show profits in the face of competition from other well-funded fintech start-ups and incumbents that looked less dusty.

Teaching and learning

This item is suitable for postgraduate courses.

Time period

The events covered by this case took place in 2019.

Geographical setting

Region:
Europe
Country:
United Kingdom

Featured company

TransferWise
Employees:
1001-5000
Turnover:
USD 151 million (2017-18)
Type:
Self-owned
Industry:
Financial services

Featured protagonists

  • Kristo Kaarmann (male), CEO and co-Founder
  • Taavet Hinrikus (male), Co-founder

About

Abstract

Banks once held a near monopoly in transferring money around the world and charged customers a high transfer fee. But ever since the 2008 financial crisis, their reputations took 'an almighty battering'. A growing number of technology-focused start-ups have taken advantage of this fact with 'intent on getting a slice of the action'. Cost was the battleground in which technology acted as the weapon in this huge business. TransferWise was one such player building a burgeoning business by undercutting banks on the price of international money transfers which reached great heights within a short span of time since its inception in 2011. The Estonian company, which had 1,200 employees, brought in USD151 million in revenue during 2017-18, showing a 75% year-over-year increase. Its net profit reached USD8 million during the same period. Experts wondered if the start-up would 'keep scaling amidst heightened trade tensions, the unfortunate rise of xenophobia and capital controls'? They also questioned whether it would continue to show profits in the face of competition from other well-funded fintech start-ups and incumbents that looked less dusty.

Teaching and learning

This item is suitable for postgraduate courses.

Settings

Time period

The events covered by this case took place in 2019.

Geographical setting

Region:
Europe
Country:
United Kingdom

Featured company

TransferWise
Employees:
1001-5000
Turnover:
USD 151 million (2017-18)
Type:
Self-owned
Industry:
Financial services

Featured protagonists

  • Kristo Kaarmann (male), CEO and co-Founder
  • Taavet Hinrikus (male), Co-founder

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