June 10, 2014 12:55 am

Branson gives backing to money transfer start-up TransferWise

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Sir Richard Branson is providing funding for London-based money transfer start-up TransferWise in the latest sign of investor enthusiasm for the city’s vibrant financial technology sector.

It has raised $25m to expand its marketing efforts, with Sir Richard contributing a significant but undisclosed share of the funds.

He was joined by existing shareholders including Peter Thiel, the co-founder of PayPal, venture capitalists Index Ventures and Kima Ventures, the investment group co-founded by the owner of Le Monde newspaper.

The news comes as investment in start-ups reaches global highs not seen since the dotcom boom. Venture capitalists poured $10bn into companies globally in the first quarter of 2014 – the most since the middle of 2001 – according to data from research group CB Insights.

TransferWise charges a minimum fee of 0.5 to 1 per cent, or £1, whichever is higher. It moves money between bank accounts in 17 currencies and takes an average of a day.

For example, to move £300 from the UK to Lithuania would cost £3, while the same transaction would cost an average of £18.10 using other operators, according to the World Bank’s remittance calculator.

The UK is trying to position itself as the global leader in the field of financial technology start-ups. Prime Minister David Cameron’s office is helping to launch FinTech UK, an industry body that is due to be unveiled this year. It has secured funding from the City of London and subsidised space from the Canary Wharf Group.

“London has deep sector knowledge about financial services, as well as being a very international city,” said Jon Bradford, the managing director of the Techstars start-up support group in London.

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