In a significant development for Britain's technology sector, London-born fintech champion Wise has reported a substantial dip in profits while confirming its strategic move to shift its primary listing across the Atlantic.
The financial technology firm saw its pre-tax profits fall by 22% to £146.5 million in the year ending March 2024, down from £187.2 million the previous year. This decline comes despite revenue climbing 23% to £1.2 billion, highlighting the cost pressures facing even the most established tech players.
Atlantic Crossing: What the US Move Means
The profit announcement coincided with Wise's confirmation that it will transition its primary listing from London to the New York Stock Exchange. This strategic shift represents one of the most high-profile departures from the London market in recent years and raises important questions about the UK's ability to retain its homegrown tech success stories.
Founded in 2011 by Estonian entrepreneurs Kristo Käärmann and Taavet Hinrikus, Wise has grown from a startup disrupting international money transfers to a FTSE 100 constituent valued at over £8 billion. The company's decision to seek a primary listing in the United States follows similar moves by other British tech firms seeking deeper capital markets and higher valuations.
Behind the Numbers: Understanding the Profit Drop
While revenue growth remained robust, several factors contributed to the profit contraction:
- Increased investment in product development and platform enhancements
- Higher marketing expenditure to acquire new customers globally
- Expansion costs associated with entering new markets
- Growing competition in the international payments space
The company processed over £118 billion in cross-border payments during the period, serving more than 12 million personal and business customers worldwide. This represents significant growth in transaction volume, suggesting the underlying business remains healthy despite the profit pressure.
Industry Implications and London's Tech Future
Wise's dual announcement highlights broader challenges facing London's financial technology ecosystem. As home to some of Europe's most successful fintech companies, the UK capital has long prided itself on its innovation-friendly environment. However, the lure of American capital markets and higher valuations is proving increasingly difficult for growing companies to resist.
Industry analysts will be watching closely to see if Wise's move triggers similar considerations among other UK tech champions. The outcome could significantly influence Britain's position in the global competition for technology leadership and investment.
For now, Wise maintains its operational headquarters in London and continues to employ hundreds of staff in the capital. The company's journey from startup to publicly-traded giant – and now its transatlantic ambitions – serves as both a success story and a cautionary tale for UK tech policy makers.
