‘We outsmarted the system’: Wise founders on fintech success

F or the co-founders of the money transfer firm Wise, who will become billionaires when their fintech company lists on the London Stock Exchange in the coming days, the venture began as a way to outsmart the big City beasts whose ranks they are about to join.

Wise’s chief executive, Kristo Käärmann, has blogged about how he and his business partner, Taavet Hinrikus, set up Wise due to frustration with the “hidden exchange rate markups” that banks charge for cross-border transfers.

While working for Deloitte in London, Käärmann wanted to transfer his £10,000 Christmas bonus to an Estonian account and was staggered to be slapped with a €500 charge.

At a party, he met Hinrikus, who already had startup success under his belt as the first ever employee of Skype and its former director of strategy.

Hinrikus was similarly irked by being hit with disadvantageous exchange rates wiring money to the UK. The pair, both now 40, came up with an innovative workaround. Each month, they’d look up the true exchange rate. Hinrikus would put money into Käärmann’s Estonian account in kroon, the local currency. Käärmann would top up Hinrikus’s UK account with pounds sterling.

“It felt like we had outsmarted a system that was built to fleece us,” writes Käärmann. “It felt good.”

Ten years on, the idea is about to make them billionaires, if they reach the £9bn valuation they are rumoured to be hoping for.

The two have already been estimated as the richest men in Estonia, thanks to the growth of Wise, previously known as TransferWise. Success building a cross-border tech business has even led to them working with the Estonian government on Covid-19 immunity passports.

First job shadow day as lingerie salesman for @KrissSoonik in Paris. danger of a black hole forming due to concentration of busty show-ware

Progress was slow at first, they have said. They faced multiple rejections from European investment groups and Käärmann pitched in answering calls on the customer service desk in the early days.

These days, he lives a very different life and also uses his Twitter account to help boost his wife’s lingerie business.

Käärmann is active on social media, which he uses to promote a business that now claims to have had nearly 6 million active customers in 2021.