TransferWise Ltd., a six-year-old financial technology startup that boasts more than 2 million users, today announced that it has raised a massive $280 million funding round to continue attracting new customers.

TransferWise operates a money transfer service that helps consumers and companies make cross-border transactions. The startup, which said it has been profitable since May, stands out by charging up to eight times less than traditional banks for handling payments.

What enables TransferWise to undercut the competition is the internally managed network of bank accounts that it uses to process transactions. For example, if a U.S.-based company makes a payment to a supplier based in France, the startup won’t wire the deposit directly but rather will issue funds of equal value from a French account. This avoids some of the complex procedures involved in moving money across borders and eases currency conversion.

Alongside its core money transfer service, TransferWise offers virtual bank accounts geared towards companies that process payments in multiple currencies. The startup will use the capital from the new funding round to expand this product line and establish a bigger presence in Asia.

According to a report by Britain’s Sky News, the investment also provided an opportunity for some equity holders to offload a part of their stakes. The inside sources who leaked the news were cited as saying that the sellers included TransferWise co-founders Taavet Hinrikus and Kristo Kaarmann (pictured). Their stakes are worth around $300 million each, minus any percentage they may have sold, based on the fact that the tipsters put the startup’s post-money valuation at $1.6 billion.

The contributors to the new funding round are evidently optimistic that TransferWise will keep growing. The investment was led by International Venture Partners and Old Mutual Global Investors, an asset management firm based out of the startup’s native London. They were joined by a half-dozen other backers, including Andreessen Horowitz.

TransferWise has raised nearly $400 million in funding to date.

Photo: TransferWise