IPOC — Transferwise???
TransferWise could be an ideal candidate to merge with Chamath Palihapitiya’s Social Capital Hedosophia Holdings Corp. III (NYSE: IPOC). So, is Transferwise Chamath's next SPAC target?
Disclaimer: Base your investment decisions not on rumors only facts. I’m long Social Capital Hedosophia Holdings Corp. III (NYSE: IPOC) since its IPO.
TransferWise could be a compelling target for Social Capital Hedosophia Holdings Corp. III (NYSE: IPOC).
TransferWise is a London-based international money transfer service founded in January 2011 by Kristo Käärmann and Taavet Hinrikus. The company supports more than 750 currency routes across the world including GBP, USD, EUR, AUD and CAD, and provides multi-currency accounts
In July, TransferWise disclosed that it is now valued at $5 billion by private investors, confirming a Sky News report. The new valuation represents an increase of 43% since May 2019 and has been triggered by a further $319 million in secondary share sales.
In this article, I will discuss why a deal could potentially happen with Social Capital Hedosophia Holdings Corp. III (NYSE: IPOC).
1. Alignment on mission
Social Capital’s mission is to advance humanity by solving the world’s hardest problems. One of those challenges is enabling financial liberty for everyone.
At TransferWise’s mission is “money without borders — instant, convenient, transparent and eventually free”.
Instead of coming from the strength of the balance sheet like large financial organization, fintechs try to solve consumer needs. TransferWise enables its customers to send money to another country, spending money abroad, or making and receiving international business payments without the excessive fees.
2. 10x Investment Opportunity
In a recent tweet, Chamath Palihapitiya made it clear that his investment strategy focuses only on high risk-reward opportunities. He tries to buy companies that have a potential to 10x in 10 years.
Transferwise is offering a potential 10x return in 10 years as the company is changing the financial landscape in a massive way. There are many positive tailwinds for money transfers but two stand out:
- Millennials are tech-savvy and want to be financially in charge
- Increased Globalization increases the need for money-transfers
TransferWise is building a new way to move money around the world. It serves already more than 8 million people and businesses. In the financial year 2020, TransferWise processed a total volume of £67 billion, and sent £42 billion across borders, saving its customers £1 billion a year compared to making the same transfers with the bank.
The 2020 financial year saw 70% growth in annual revenue to £302.6 million and was the fourth year in a row in which TransferWise has posted a profit.
That means 1 in every £25 sent by people around the world is now with TransferWise. To learn more about, you can read their latest annual report.
Here are the most important statistics of the 2020 annual report:
3. Prolific investors
TransferWise is backed by a prolific team of investors who believe that there’s a dire need for innovation in financial services: Andressen Horowitz, Valar Ventures, IA Ventures, Index Ventures, Richard Branson’s Virgin Group, Kima Ventures, and Seedcamp are among the investors of TransferWise.
Ian Osborne, the co-founder of Social Capital Hedosophia, is also one of the investors in Transferwise. His company Hedosophia has invested in an impressive portfolio of fintech companies:
4. Recent developments
Jackie Reses, one of the directors of IPOC, who was also recently called “The Most Powerful Women In Finance”, will leave Square as a director on October 30, 2020, according to a recent K8 filling.
This development looks like a preparation for Jackie Reses taking a major role in the partner company of IPOC. With her extensive background in fintech, she would be a great fit for TransferWise.
https://sec.report/Document/0001193125-20-262029/
You can learn more about Jackie Reses in her podcast with ARK Invest:
Final thoughts
This article is just an educated guess on what Social Capital Hedosophia Holdings Corp. III (NYSE: IPOC) could merge with. The company could eventually merge with another entity.
When Käärmann, CEO and Co-founder of TransferWise, was asked by TechCrunch about a potential IPO, he said:
“For us, it’s a decision that really depends on what the benefit is. Is it a useful time for the company?, and that time hasn’t come yet” (Kristo Käärmann, CEO and Co-founder of TransferWise)
He added that it will only happen when it’s useful for the company and for its customers. Maybe the time is right…
Disclaimer: Base your investment decisions not on rumors only facts. I’m long Social Capital Hedosophia Holdings Corp. III (NYSE: IPOC) since its IPO.
