16. TransferWise

Peer-to-peer money transfer service

Taavet Hinrikus and Kristo Käärmann, founders of TransferWise
Source: Transferwise
Taavet Hinrikus and Kristo Käärmann, founders of TransferWise

Founders: Taavet Hinrikus, Kristo Käärmann (CEO)
Date launched:
Funding: $32.4 million
Industries disrupted:
Currencies, Financial Services, Personal Finance
Disrupting: Outerwall (Travelex), Wal-Mart, Western Union
Competition: Azimo, CurrencyFair, peerTransfer

When two friends living in Europe got fed up with the fees big banks were charging to transfer money between their jobs in Estonia and London, they knew there had to be a better way. There was: TransferWise, the company they started in 2010. The London-based firm enables people to make international money transfers between 19 currencies (so far) for a fee of 0.5 percent for anything $295 and above. Many banks charge about 10 times that amount. Since its founding, the company has helped customers make foreign-exchange transfers totaling more than $1 billion.

Co-founders Taavet Hinrikus—Skype's first employee—and Kristo Käärmann, a former management consultant with PriceWaterhouseCoopers, said banks don't use the mid-market exchange rate when transferring money, so customers wind up paying more than just a simple transaction fee. With TransferWise, a customer in, say, Italy looking to transfer money to a relative in Britain would deposit money in TransferWise's Italian account.


The company's proprietary algorithm would then search for someone looking to make a transfer in the opposite direction (Britain to Italy) who is depositing money into TransferWise's British account. The monies are then paid out of each of the relevant national accounts. TransferWise charges less than half of what the banks charge for this service. Some big-name investors like how the company is shaking up the financial services industry. PayPal's co-founder, Peter Thiel, selected TransferWise as his first investment in Europe.

How did you come up with your big idea?

"When we first became expats in London, we were frustrated about how much of our money got lost when we sent money back home. We wanted to make overseas transfers much cheaper, faster and more transparently priced." -Taavet Hinrikus, co-founder


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