Payments startup TransferWise nabs $6m from PayPal founder's fund

International money transfer startup TransferWise will roll the service out globally in the coming year.

London-headquartered payments startup TransferWise has landed a $6m in an investment round led by Valar Ventures, an international fund started by PayPal founder Peter Thiel.

TransferWise was launched two years ago with the aim of offering a cheaper alternative to international bank transfers and currently supports 36 currencies — most in the Single European Payments Area with limited support for some locations outside the region. 

TransferWise has pitched its service as a money saver for the likes of freelancers who need to bill international clients in a different currency to their own, and aims to undercut fees imposed by PayPal and the flat fees charged by banks.

Transfer payments go via TransferWise, which makes the conversion and pays the recipient in the required currency. For British Pound to Euro transfers of less than €200, it charges £1 or €1. Larger payments attract a 0.5 percent fee while payments to Australia and Japan cost more since funds are converted via the SWIFT international transfer system. An Australian dollar service however is in beta.

The company claims to have transferred more than £125m of its customers' cash to date.

The $6m round and Valar Ventures' management input will help the company expand support internationally by the end of the year to Canada, Australia New Zealand, Singapore, Hong Kong, South Africa, Russia, Ukraine, Israel, Turkey and extend its presence in Europe to Bulgaria, Czech Republic, Latvia and Lithuania.

TransferWise was founded in 2011 by Estonians CEO Kristo Käärmann, and executive chairman, Taavet Hinrikus. Käärmann was a PwC and Delloitte consultant while Hinrikus' claim to fame is that he was Skype's first employee.