Boost for City as payments app Wise closes in on a £9bn London listing

Fintech float is City’s biggest in a decade: Coup for Square Mile as payments app Wise closes in on a £9bn London listing

British financial technology star Wise is teeing up the biggest stock market float in London for a decade.

In a fresh boost for the Square Mile, the company is set to announce a listing that could see it valued at up to £9billion.

That would make it the most valuable business to float on the London stock market since Glencore in 2011 – and hand its founders up to £3.6billion.

London float: Wise, which was set up by Estonian entrepreneurs Kristo Kaarmann (left) and Taavet Hinrikus (right) is set to announce a listing that could see it valued at up to £9bn

Wise is being advised by Goldman Sachs and Morgan Stanley and the deal could be announced this week, according to Sky News. It follows a shake-up of stock market rules designed to attract more tech firms to the UK.

Others that have listed this year include cyber security provider Darktrace, food delivery firm Deliveroo, chip designer Alphawave IP, e-cards retailer Moonpig and online marketplace provider Auction Technology Group, although the results have been mixed.

Darktrace slashed its valuation ahead of listing, while Deliveroo and Alphawave’s share prices crashed when they made their debuts.

Wise was set up by Estonian entrepreneurs Kristo Kaarmann and Taavet Hinrikus in 2010 to help people send money abroad more easily and inexpensively.

The London firm has become an international payments giant, serving 10m customers and transferring £5bn every month.

It is now seen as one of Britain’s most valuable fintech businesses, employing 2,100 staff, with backers including Virgin tycoon Sir Richard Branson, Paypal founder Max Levchin, Scottish Mortgage and hedge fund tycoon Dan Sundheim’s D1 Capital Partners. 

Kaarmann and Hinrikus are thought to control around 40 per cent of shares, and stand to become billionaires overnight if the float goes ahead.

If the firm is valued at £9billion, their stakes could be worth £3.6billion combined. However, Wise’s float could be on course for controversy after it was claimed that the founders and early backers will seek to retain a tight grip.

Wise is choosing not to raise money from the float and will opt instead for a direct listing, while also using a dual class share structure, where certain shares carry more voting power than others, doing away with the traditional ‘one share, one vote’ principle.

This is common at big American tech companies and has been used by founders such as Facebook boss Mark Zuckerberg to ride roughshod over other investors.

In a review of listing rules this year, Lord Hill recommended that firms be allowed to enter the premium segment of the London Stock Exchange even if they use dual class share structures. 

Deliveroo did this, giving founder Will Shu massive voting rights but some big battalion investors shunned the float over governance fears.

Russ Mould, investment director at AJ Bell, warned: ‘Big institutions are clearly not happy about dual class arrangements. 

What many will be keen to understand is whether this is a permanent arrangement or limited to a finite period of time.’

Tom Powdrill, at shareholder advisory service Pirc, has previously slammed such dual class structures. ‘They are called equities, they should be equitable,’ he told the Financial Times.

Wise’s float timing is expected to depend upon when it secures approvals from regulators, but it could happen within days. It declined to comment last night.  

Future Biogas plans London float

Clean energy group Future Biogas plans to list in London next month.

It runs ten biogas plants for investors such as Aviva and JLEN Environmental Assets and wants to build 25 more of its own by 2028.

Founded in 2008, it is looking to raise £35million to put towards new projects such as capturing carbon and storing it under the North Sea.

It will catch emissions from its plants and, working with a huge venture in Norway, inject them underground. 

Future Biogas’ plants use micro-organisms to digest crops such as maize to generate biogas, which is much less polluting than using fossil fuels.