Draper Esprit sells remaining stake in TransferWise for €19.8m

29 Jul 2020

TransferWise CEO Kristo Käärman. Image: TransferWise

Draper Esprit has sold its remaining stake in TransferWise, while the fintech firm is now valued at $5bn after a secondary share sale.

Dublin and London-listed venture capital firm Draper Esprit has sold its remaining stake in TransferWise for a cash return of approximately £18m (€19.8m). Draper Esprit first acquired a stake in the company in October 2017.

In total, Draper Esprit said that it has generated £33m (€36.4m) from its investment in the money transfer service from two share sales.

Meanwhile, TransferWise confirmed today (29 July) that it is now valued at $5bn after a $319m secondary share sale. This is a 43pc increase in valuation since May 2019.

The London-headquartered fintech firm was launched in 2011 and now serves 8m customers worldwide, processing £4bn in payments each month.

A ‘healthy’ return on investment

Draper Esprit originally acquired a stake in TransferWise as part of the acquisition of Seedcamp Funds I and II. The VC firm said that the total cash realisations from that acquisition to date are approximately £37m, with around £5m of remaining fair value.

Commenting on the sale of its stake, Draper Esprit chief executive Martin Davis said: “The TransferWise disposal highlights our focus on active management in the portfolio and is also an excellent example of a successful secondary transaction that has enabled us to generate a healthy return on our initial investment in a relatively short space of time.”

Davis said that well before the Covid-19 pandemic, TransferWise was a “global leader” in its field and as the global economy slowly emerges from crisis mode, the firm will be “well placed” to benefit from significant changes.

Other deals

Draper Esprit also announced that its fair value holding in software company UiPath increased by £12m as a result of fundraising – making its holding worth approximately £40m. The recent funding round was led by Alkeon Capital Management with participation from Sequoia Capital and Tencent, among others.

UiPath, which provides a robotic software solution for IT-based process automation, plans to spend the latest batch of funding on R&D to support future growth. Draper Esprit acquired its stake in UiPath through the acquisition of interests in the Earlybird Digital East Fund I.

“UiPath’s latest fundraise reaffirms the huge opportunity offered by strategy of investing in high-growth private tech companies, as well as the quality of the companies within the Earlybird Digital East Fund we acquired in January 2019,” Davis said.

“The TransferWise transaction and UiPath funding round provide a further demonstration of value accretion in excess of fair value holdings.”

In addition to these two announcements, Draper Esprit revealed that it has led a $20m Series C investment into fraud detection company Ravelin.

Kelly Earley was a journalist with Silicon Republic