Cross-border fintech startup Airwallex raises $100M at a valuation of over $1B – TechSwitch

Australia-based Airwallex is the tech startup to enter the billion-dollar ‘unicorn club.’ The firm introduced at the moment that it has closed a $100 million Series C spherical that values its enterprise above $1 billion.
Started in Melbourne in 2015 by 4 Chinese founders, Airwallex gives a service that lets firms handle cross-border income and financing of their enterprise very like an alternative choice to consumer-focused service TransferWise.
Its clients can, for instance, arrange abroad financial institution accounts if they’ve paying clients abroad. When they need to transfer that income again to their HQ, they merely accomplish that via the Airwallex system which makes use of inter-bank exchanges to commerce foreign exchange at a mid-market price. That’s one thing that may save its purchasers as a lot as 90 p.c on their international alternate charges, and it massively simplifies the problem of doing enterprise abroad.
This new spherical of funding is led by DST Global — the excessive profile buyers that’s backed the likes of Facebook, Twitter, Spotify, Xiaomi and extra — with participation from returning buyers that embrace Sequoia China, Tencent, Hillhouse Capital, Gobi Partners, Horizons Ventures and Australia’s SquarePeg Capital. Airwallex has now raised over $200 million; its earlier funding was an $80 million increase round 9 months in the past.
Most impressively, the corporate has develop into a unicorn inside three years of its launch — that’s a powerful feat, the corporate has come a good distance since we wrote about its $3 million seed spherical in late 2016. CEO Jack Zhang instructed TechSwitch that the corporate is being public with its valuation for the primary time as a result of it gives a serious validation that may assist it construct a popularity and develop extra providers within the monetary providers house.
“We talked to a number of global funds we found interesting but we picked DST because our biggest priority is international expansion and [the firm will] help us opening doors and going after larger opportunities,” Zhang stated of the lead investor for the spherical.
Indeed, the Airwallex imaginative and prescient has grown since that seed spherical. Today the corporate has eight places of work worldwide, over 260 employees, and it helped ship “billions” of U.S. dollars worldwide via its fee flows. This yr it expects that quantity to develop to “tens of billions,” whereas it has additionally expanded its focus when it comes to each clients and providers.
“Traditionally, we served a lot of the internet companies, but now we are saying that it doesn’t matter about size,” Zhang stated. “We want to go after small companies and help all businesses to grow and expand globally.”
Airwallex founders (left to proper) Xijing Dai, Jack Zhang, Lucy Liu and Max Li
On the product facet, he added that “the vision has evolved and now we’re building a fundamental global finance infrastructure.”
What does that imply precisely? Well, Zhang stated Airwallex needs to be greater than only a cross-border companion for firms. It already provides providers like digital financial institution accounts in 50 nations, it plugs in to companions to supply different monetary providers — for instance Stripe — and its deliberate future merchandise embrace bank card issuance to permit firms to handle cash abroad with better granular management.
Indeed, already Airwallex has an inside crew nicknamed ‘Alpha’ that helps SMEs and different companies to develop abroad. That’s very very like Amazon’s AWS enterprise, whereas Zhang stated Airwallex has made undisclosed investments in two firms the place it sees an aligned international imaginative and prescient.
“Alpha identifies early-stage companies and helps them to grow,” Zhang defined. “Whether they work with us or not we don’t care, we help connect them to investors and networks.”
The concept for the enterprise got here to Zhang, who frolicked at Australia banks ANZ and NAB, after he grew pissed off of the challenges of importing abroad items for a espresso enterprise that he invested in with pals.
“We were importing from overseas and paying Western Union a bunch of money,” he recollects. “It was all very slow.”
Airwallex has mounted that downside for any would-be international-minded espresso store house owners/buyers, however Zhang is satisfied that the way forward for his enterprise is to be an ecosystem for international banking and monetary providers. Precisely what that may imply sooner or later isn’t clear. But firms that work carefully with enterprise clients, Airwallex is ideally positioned to supply loans and financing, both straight or through companions, and actually contain itself in rising its clients and their companies.
Having began targeted on Asia — and China particularly — Zhang is gunning for international progress, and that actually means the U.S. and U.Ok and rising past Airwallex’s places of work in London and San Francisco. The firm is trying to kickstart that push via acquisitions, with Zhang admitting his crew is “actively seeking interesting payment startups in the U.K and the U.S.”
Airwallex can also be casting its eye on banking licenses in chosen markets, which might imply it returns to boost extra capital on the finish of this yr or the startup of 2020.
Airwallex CEO Jack Zhang bought the thought for the corporate after rising irritating with the price and ache of exporting abroad items for an Australia-based espresso store he invested in
The firm isn’t saying an excessive amount of about its personal financials at this level. Airwallex makes its cash taking an undisclosed minimize of the transactions its purchasers make — Zhang calls it “tiny” however he stated income grew five-fold final yr whereas it’s seeing “double-digit” progress on a month-to-month foundation. The economic system is working on stable unit economics, he maintains.
For now, the backing of its buyers is permitting Airwallex to develop its enterprise while not having to concentrate on earning profits. That’s confirmed difficult for some fintech firms — similar to TransferWise and Europe’s challenger banks — however Zhang is assured that when that modifications, his firm may have little hassle being sustainable.
“We believe that there are huge opportunities for companies such as Airbnb and Amazon while SMEs need a true one-stop shop for their business to go from local to global. We know we have so many revenue streams we can get on the future, [but for now we are] focused on customer acquisition and helping our customers to scale,” he stated.