TransferWise, one of Europe’s largest financial technology (fintech) start-ups, said Monday it was profitable for the second year in a row.
The London-headquartered money transfer firm reported an annual post-tax net profit of £6.2 million ($8 million) for the fiscal year ending March 2018.
Annual revenue nearly doubled to £117 million during the period, from £66 million the previous year, TransferWise said. Operating profit came in at £9.5 million following a loss of £519,000 last year.
The company’s accounts entered into the black for the first time in March 2017, six years after the firm was founded by Estonian entrepreneurs Taavet Hinrikus and Kristo Kaarman.
“We’ve proven that fintech can offer consumers an unbelievable experience at a low price, all whilst creating a solid business that can be trusted long-term,” Kaarman, TransferWise’s chief executive, said in a statement Monday.
“Looking forward, sustained growth and our healthy financial position means we can continue to drive down costs whilst investing in developing our product.”
TransferWise is counted among Europe’s “unicorn” start-ups — firms valued at $1 billion or more — with a reported valuation of $1.6 billion.
It has raised a total of $397 million since it was founded in 2011. Backers include asset management giant Old Mutual, Silicon Valley venture capital firms Institutional Venture Partners and Andreessen Horowitz, and British billionaire Richard Branson.
The firm says that £3 billion worth of transactions are moved around each month on the TransferWise app by its more than 4 million users.
The company makes money through fees charged on international transfers, which it boasts are up to eight times lower than those charged by banks.
Last year, it introduced its traveler-friendly borderless account to European customers, which lets users hold over 40 currencies and switch between currencies instantly. TransferWise plans to roll out the product to U.S. users later this year.
And in July, TransferWise tied up with French bank Groupe BPCE, in its first major bank partnership, to provide the lender’s customers access to its money transfer service. It has also struck deals with rival fintech firms Monzo and N26.
Monday’s earnings news could signal a changing landscape for fintech firms like TransferWise when it comes to profitability. Many start-ups in the sector have struggled to break even due to the cost of investing in their products and scaling their business while offering cheaper services than large banks.
Rival currency exchange and banking app Revolut for instance said earlier this year that it had broken even for the first time in December 2017. Meanwhile, another competitor, WorldRemit, expects to turn a profit by 2019.
The money transfer industry is a competitive one, with established giants like Western Union and MoneyGram, both of which have been investing heavily in the digital segments of their businesses.
