Wise, UK’s #1 IPO, Started At Coworking Spaces Too

Wise started life in 2011, when its founders, Taavet Hinrikus and Kristo Kaarmann encountered a problem that plagued millions of working professionals all over the world.

The problem related to spending money back home and banks charging hefty hidden fees over exchange rate conversions. The two realised the need to create a platform where the money would never leave the boundaries of a country and this would automatically eliminate hidden costs.

They helped address a problem and created one of the biggest fintech companies in the world. TransferWise changed its name to ‘Wise’ in early 2021. In July it went for an IPO listing directly on the London Stock Exchange.

Within 10 years, the company commanded a valuation of nearly £8 Billion or $11 Billion. In this article, we are going to evaluate why Wise became so successful in the fintech space. We are also going to look at a hidden piece of trivia that not a lot of people that use Wise are familiar with.

TransferWise: The Start of the Story

Kristo Kaarmann and Taavet Hinrinkus started their professional journeys at Deloitte and Skype respectively. Both were from Estonia and send back money using the two most popular mediums at the time, Western Union and Money Gram.

However, both these platforms worked with banks and charged high hidden fees as well as currency conversion rates. The two realized that their families were receiving a lot less money than they were sending from the UK.

To overcome the issue, they tried an experiment. Hinrinkus, while he worked in London for Skype was given his salary in Euros. While Kaarmaan got his salary in British Pounds. The two would deposit their money in each other’s bank accounts.

This experiment saw them get better values for their money and they immediately saw a market problem which a good fintech product would be able to save. Hence, TranswerWise was born in 2011. Moving money domestically did not involve any stress or hassles. More importantly, they could save a lot more money and their families could get more as well from the transfers.

TransferWise Becomes Wise: Why the change?

According to TransferWise’s own data, they have helped 10 million customers, that include individuals and businesses move more than $74 Billion in 2021 alone. Today, Wise is one of the leading success stories in the world of fintech.

However, the owner’s mission of making world finance more transparent necessitated the rebranding of the company. This has also shed light on new products and advancements that will allow the company to step beyond simple international money transfers and explore other profitable areas in the fintech space.

In a blog post, one of the Co-Founders, Kaarmaan mentions how the problem of international finance goes beyond money transfers. He says that platforms like Wise still need to overcome and navigate hidden mazes and complex puzzles of how banks and lending institutions charge fees and commissions for services that they should not.

Wise has in 2021, come up with its own International Debit Card. The same is operational in more than thirty countries of the world. It can do payments and transfers in an astonishing 50+ international currencies.

The History of Wise: How it started in a Coworking Space?

Wise has revolutionized international money transfers. In 2021, Wise serves millions of individuals and businesses and is out on a quest to make international finance credible, safe, transparent, and free from corporate greed.

What not a lot of people know is that the now billion-dollar fintech company started life in a coworking space in London. Kaarmaan and Hinrinkus started work on TransferWise is one of London’s now-famous coworking spaces.

A lot of experts have pointed out that newer companies that are growing exponentially have a lot to do with the kind of office culture they have. Coworking spaces have been found to give professionals more freedom to creatively pursue product development, hold meetings and allow for flexible use of spaces.

A lot of start-ups do not have the money to invest in high-end office rentals. While they want everything from work desks to meetings rooms as well as the cafeteria, it is very difficult when 90% of your money is dedicated to R&D and product development.

A coworking space gives such companies the benefit to enjoy all the above- desks, meeting rooms, and cafeteria. However, they can offer all this at a fraction of the costs.

Additionally, you do not have to go through the lengthy paperwork that an office rental brings with it. So many terms and conditions, security deposits, and legalities occupy the mental space and peace of the founders of a new company.

Benefits of Coworking Office Spaces for New Businesses

In this section, we are going to list down some of the major benefits of coworking spaces. According to a paper published in the Harvard Business Review, working professionals find coworking spaces to be better than traditional office spaces.

There is no competition or office politics in coworking spaces. So many freelancers, remote workers, and professionals work in different entities that the formal overwhelming structures of internal office politics are not able to dominate them.
Coworking spaces have fostered a culture of cooperation and togetherness. You have different professionals working on a range of different projects. On occasions, someone can help out someone else with regard to a PPT or setting up the video conferencing.
A lot of working professionals and small start-ups who use coworking spaces speak about the culture of networking and learning. It is not difficult to find help in a large coworking space. This helps in fostering a spirit of collaboration and development.
Unlike traditional offices that have set timings, coworking spaces are open 24×7. This allows people to work when they feel like at their own will and without compromising on their independence. This helps in better productivity and output.
Coworking spaces are prime examples of communal living. Everyone that works at one feels a strong sense of being part of a community. This community is thriving, creative, and pushes the boundaries of work performance in their respective fields.

Can Other Small Start-Ups learn a thing or two from Wise’s Coworking Beginnings?

New start-ups can scale up incredibly fast thanks to a workforce that believes in free thinking, innovation, and creativity. A lot of it has to do with the environment that they work and operate. Starting in a coworking space can be a great decision as it can help save money and invest in areas that are in dire need of immediate attention.

Wise has shown the way in taking a business model, creating the perfect environment to flourish and become one of the most successful tech businesses in the UK. With the fintech world becoming a major force to reckon with in the near future, Wise is set for great things.

The company now has three comprehensive products- Wise (personal individuals), Wise Business (small and big businesses), and Wise Platform. With profitability coming in as early as 2017, much leading business and financial experts are closely monitoring developments.

Photo credits: eOffice