Venture

TransferWise Posts Profit Despite Being A Unicorn

Money-transfer startup TransferWise disclosed today that it posted a post-tax profit in its most recent fiscal year, along with 77.3 percent revenue growth.

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TransferWise’s ability to grow while posting profit is notable. It is rare for a startup to generate profit, as the cohort of companies are generally aimed at maximizing growth at the expense of profitability. Fast-growing private companies often raise external capital to fuel investments into product and sales, helping to scale revenue while spending ahead of income.

[bctt tweet=”The fact that a company can generate profit with unicorn level funding at a unicorn valuation of $1.6 billion is nearly heresy.” username=”alex”]

However, TransferWise’s numbers show that some companies can grow at a quick clip while not losing money. The fact that a company can generate profit with unicorn level funding at a unicorn valuation of $1.6 billion is nearly heresy.

TranserWise’s Results

The London-based company released a number of metrics relating to its performance:

  • 2016 (year ending March, 2017) revenue: $85 million.
  • 2017 (year ending March, 2018) revenue: $151 million.
  • 2016 operating profit: -$670,000.
  • 2017 operating profit: $12.3 million.
  • 2017 “net profit after tax:” $8 million.

On top of growing quickly while generating profit, TransferWise’s profitability is also growing as its revenue expands. That may seem intuitive, but many companies sacrifice short-term profits while growing. To see TransferWise grow profits while posting nearly 80 percent year-over-year growth is impressive.

Due to this, TransferWise can go public whenever it wants to. This year has seen the IPO window stick open, allowing all sorts of companies that are often in far weaker financial shape than TransferWise to go public.

One more thought: TransferWise is a firm focused on cutting prices (Amazon may be the correct cognate here). Its release notes that it cut a few dozen price points in a three-quarter period. Also, the company shared a single graphic, detailing falling fees and rising customer counts. The implication there is plain enough.

A note for all other private unicornsL Do you want great press? First, generate strong financial operating results. Then, release them. Tada!

Top Image Credit: Li-Anne Dias

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