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The co-founder and chief executive of payments app Wise sought to apply a positive gloss when the group reported its first results as a public company this week.

“We’re now moving 3.5 per cent of all personal money that moves across borders,” Kristo Käärmann told shareholders. “We’re really pleased to get this far — but there’s still 96.5 per cent left to go.”

But the Estonian’s entrepreneur’s efforts were not only undermined by a jump in costs that curbed profit growth at Wise, which was valued at almost £9bn when it went public in London 12 months ago in a rare coup for the UK market.

Just a day before its debut results, Wise, formerly known as TransferWise, revealed that the UK’s Financial Conduct Authority had launched an investigation into Käärmann over deliberately defaulting on tax payments.

The FCA opened the probe, which comes after Käärmann was fined by HM Revenues & Customs, because of the entrepreneur’s status as an “approved person” who the regulator must deem “fit and proper” to do their job.

“It is disappointing news,” said Russ Shaw, founder of Tech London Advocates, a network of tech entrepreneurs. “It will undeniably put added pressure on the founders and the Wise board to ensure the matter is handled responsibly and in a timely manner.”

The run-in with the regulator caps a bruising first year as a public company for Wise, which Käärmann co-founded in 2010 with his friend Taavet Hinrikus, who was chair until last year, as the pair spotted an opportunity to shake-up the business of payments transfers long dominated by banks and high fees.

The 41-year-old has said he was inspired to found the business after being shocked at the exorbitant cost of transferring money to Estonia from London, where he had moved to in 2007 to join Big Four auditing and consulting firm Deloitte. Wise has set out its “mission zero” — the aim to eventually make cross border transfers free.

“Why would anyone in their right mind risk their hard-earned cash for bankers to invest in loans for their profit, without any return to the deposit holder,” Käärmann noted in 2015 as Wise’s ambitions attracted investors including Index Ventures, Silicon Valley Bank and Baillie Gifford.

“If you look at the way in which they built the business and framed themselves, they were very aggressively saying ‘we’re on the side of consumers’,” said Dom Hallas, executive director of Coadec, a trade body that represents UK start-ups.

But despite being profitable since 2017, Wise shares have plunged almost 70 per cent since its listing, while the blue-chip FTSE 100 index is little changed over the same period.

Analysts say that like most fintechs, Wise has been swept up in a brutal market sell-off as rising interest rates prompt investors to ditch the high-growth companies they coveted for much of the past decade.

Underlining the abrupt shift in sentiment, investors this week seized on the sharp rise in costs at Wise — up 48 per cent to £321.4mn — rather than its forecast that revenues would grow between 30 per cent and 35 per cent this year. In the 12 months to March 31, Wise’s revenues climbed 33 per cent to £559.9mn and its pre-tax profits grew 7 per cent to £43.9mn.

As Käärmann faces the challenge of winning over investors, current and former Wise employees — the company has roughly 3,400 staff — say his approach to the business is unlikely to change.

“He’s extremely humble. If you didn’t know he was the CEO, you wouldn’t know,” said a former employee. “He hot desked with the rest of us.”

The walls of its London office are decked with mottos including “consumers > team > ego”; another is “no drama, good karma”.

Käärmann, whose interest in extreme sports extends from adventure racing to snowboarding, and has an annual ritual of riding through Africa on motorcycles with his brother, was applauded for Wise’s decision to list in London rather than New York.

“Fintech is a core sector for the city, and the UK as a whole, and it is vital that early stage founders see a clear path to exit here,” said Oliver Richards, a partner at London-based venture capital fund MMC Ventures. “Wise’s decision to list here was a fantastic show of confidence in London.”

The FCA’s investigation, however, has helped sour the once celebratory mood. Following the HMRC penalty, Wise itself completed an investigation with legal advisers at the end of the last year, before passing its findings to the regulator.

David Wells, the chair of Wise, said the board took Käärmann’s tax default and the FCA’s investigation “very seriously”, but that it would continue to support him as chief executive.

“As a brand, Wise has been built on being a fair, good value for money and transparent business,” putting pressure on Käärmann to maintain the highest standards in his own life, said Shaw London Tech Advocates.

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