Airwallex Raises $ 100 Million at $ 5.5 Billion Valuation to Expand Global Business Banking and Payments Platform – TechCrunch
Ecommerce and other online businesses are increasingly globalizing in their operations and customer base, and a startup called Airwallex – which has built a banking solution that offers the ability to provide cross-border financial services – has seen an increase. massive activity. . To further capitalize on this opportunity, the company is today announcing growth financing.
Hong Kong and Melbourne-based Airwallex has raised $ 100 million, capital it will use to continue to grow its banking and payments business in more markets and to invest in product expansion.
The financing – which is led by Lone Pine Capital and joined by 1835i Ventures (the venture capital arm of ANZ, the Australian and New Zealand banking group) and Sequoia Capital China, all previous investors – is an extension of the series. E of the company that it announced only in September; and that brings the total of the round to $ 300 million.
The valuation is also lengthened with this last injection: Airwallex is now worth 5.5 billion dollars (against 4 billion in September). From what we understand, the company was getting terms listings of up to $ 7 billion from outside investors (it was this outside interest that started the cycle in the first place).
Airwallex now has approximately 20,000 customers in areas such as e-commerce, technology / SaaS companies and professional services. It also has 500 large platform customers (Papaya Global and GOAT are two examples) who have integrated Airwallex services into their own services to fuel their own customer transactions.
This company has seen a strong increase in its activity following some key developments in the world.
For starters, the COVID-19 pandemic has resulted in a significant shift towards more e-commerce among consumers and businesses. In turn, companies have had to expand their financial infrastructure to accommodate more customers. And because e-commerce has broken down the barriers of where you can do business, they’ve also had to expand their financial reach to reach customers in increasingly large geographies. COVID-19 has also massively disrupted supply chains, so companies have also had to become more entrepreneurial in the way they manage them: they may now have to work with more partners and potentially be agile enough to pay different people. month to month.
All of these present the types of use cases that correspond to the types of services offered by Airwallex. Jack Zhang, co-founder and CEO of Airwallex, said the company’s revenue grew 100% in the third quarter compared to the second quarter. Its annualized revenue in this last quarter was $ 100 million. “We had a target to meet that target at the end of the year, but we hit it a quarter earlier,” he said.
It also means that a number of other companies are looking to meet this need as well: Airwallex’s competitors through its various services include Stripe, PayPal, Revolut (via Revolut Business) and more.
Airwallex originally built their business around corporate banking – their thesis was that companies had plenty of banking options when it came to doing business in their own markets, but for those who worked beyond that. borders, it offered national and international accounts that worked as easily as they did domestic, as well as card issuance, transfers and currencies, payments, etc. More recently, the company has moved to payments to supplement this. The plan will be to add more services natively to this stack, as well as integrate with third-party vendors through an app store it is currently developing. This will be launched potentially next year.
Zhang also said some of the funds will be used for mergers and acquisitions, as part of the inevitable consolidation that we will continue to see in fintech.
“We have now raised $ 800 million over the past 6 years, with $ 600 million over the past two years, and we still have $ 600 million in the bank right now,” he told TechCrunch. “A very large portion of this amount will be used for mergers and acquisitions. The features Airwallex wants to have as a native part of its stack that it could buy instead of building on itself include subscription payments; software to automatically calculate the stamp duty based on the market where the items are sold; and more data analytics to help customers better analyze their revenue. “I think there will be consolidation in the next period. But it won’t be just two players. The [fintech] the space is large enough for a dozen winners.
And it looks like Airwallex is positioned as one of those winners. Zhang confirmed to me that Stripe – which is now a key competitor of Airwallex – approached the company to acquire it around 2018/2019, when Airwallex was much smaller but was already developing a strong presence in Asia – Pacific, which is still its largest market, even as Airwallex deepens in EMEA and North America. (This would have been a big step for Stripe in the region, which has taken off instead.)
Zhang said another large fintech, currently valued at around $ 20 billion, also approached Airwallex more recently. Neither is it, in part because Airwallex is now too expensive, he said.
“I think we’re probably too big for others to buy from us,” Zhang added.
As for the next liquidity step, an IPO “isn’t on the agenda,” but it’s something the company will potentially think about in 2023 or 2024.
“Airwallex’s accomplishments over the past quarter alone are a testament to the strength of the company’s business model and its unique ability to meet the changing needs of its customers in a competitive digital payments market,” said David Craver, Co-Director of the Investment Office at Lone Pine Capital. “The future is bright for Airwallex, and we look forward to helping their team unlock greater growth opportunities. “