Cross-border payments firm Airwallex said on Tuesday that it had raised $80 million from some of the world’s most successful technology investors excited about its expansion across Asia and its mission to take the friction out of cross-border payments.
Among the investors in the series B fundraising were Chinese private equity firm Hillhouse Capital and Horizons Ventures, which manages the private wealth of Hong Kong billionaire Li Ka-shing.
Airwallex also attracted Sequoia Capital China and early-stage corporate venture capital firm Central Capital Ventura, which is backed by Indonesia's Bank Central Asia. Another investor in the series B round was Australia's Square Peg Capital.
Airwallex’s investors in its previous series A round included Chinese internet behemoth Tencent and again, Sequoia Capital China. Airwallex is integrated with Tencent's WeChat Pay through an application programming interface.
Securing such high-profile backers early on in a company’s life is a surefire way to attract the attention of other investors to fund its growth. This is partly because top-tier names give the impression that the startups can draw upon the technology resources and talent of their benefactors, as well as their capital.
“This is a chance for us to step-up,” said Airwallex’s chief executive and co-founder, Jack Zhang in a telephone interview with FinanceAsia. He added that Airwallex plans to expand its team significantly in Melbourne and Shanghai.
Investors in the financial technology space are also keen not to miss out on opportunities that their peers may have spotted as the proliferation of smartphones across Asia combines with the growing affluence of the region’s middle class and the increasing ability of companies to harvest people's data.
"With the acceleration of global economic integration, foreign exchange and cross-border payments have received more and more attention from organisations," said Sequoia Capital China’s managing partner, Neil Shen.
ANT THAT ROARED
Setting a notable benchmark also is Chinese payments firm Ant Financial, which closed a $14 billion fund raising in June from some of the world’s best-known investors such as Singaporean state funds Temasek and GIC. Some of that capital will be used for its expansion in Southeast Asia.
Governments have looked to support the expansion of payments to support the boom in e-commerce across the region – fintech companies are rushing to fulfil that need.
“I liken fintech in Southeast Asia to where e-commerce was around four to five years ago,” one fintech investor based in Singapore told FinanceAsia.
To be sure, Airwallex’s fundraiser is dwarfed by Ant Financial’s but it is still one of the largest early-stage fundraisers ever in Australia, according to Crunchbase.
Melbourne-based Airwallex makes international money transfers for clients by collecting payments and providing foreign exchange and local payment distribution. It said the fresh funds will be used to expand its operations, particularly in Southeast Asia.
While the vast majority of payments startups are loss-making, many investors are focused on the velocity of their growth and their potential to become dominant players in their sub-segments.
Airwallex’s Singapore-based team has grown rapidly, adding senior product and business development roles in recent months. Airwallex will also seek to acquire a virtual banking licence in Hong Kong.
Its platform supports thousands of transactions per second, providing a cost-effective alternative to existing payment networks for businesses looking to automate and scale international payment workflows.
“While we’ve yet to see which companies will weather the inevitable boom-and-bust cycle, we feel we are still in the upswing stage of the cycle,” the fintech investor said.
