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Airwallex

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Airwallex is a multinational financial technology company offering financial services and software as a service (SaaS). Founded in 2015 in Melbourne, Australia[3] and currently based in Singapore,[1] the company is a financial technology platform providing cross-border payments and financial services to businesses through a proprietary banking network and its API.[4][5] It also provides services and products such as business accounts, expense cards, and payroll,[6] among others.[7] It was Australia's third technology unicorn company overall.[8] With a valuation of US$5.5 billion, as of 2022, the company processed $50 billion in annualized transactions.[9]

Airwallex
Company typePrivate company
IndustryFinancial services, technology, fintech
Founded2015 in Melbourne, Australia
FoundersJack Zhang, Max Li, Lucy Liu, Xijing Dai, Ki-lok Wong
Headquarters
Singapore[1]
Areas served
130 countries[2]
ServicesPayment processing, forex, debit cards, banking services
Total equityUS$5.5 billion (2022)
Number of employees
1,400 (2022)
Websiteairwallex.com

History

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Founding and growth (2015–2018)

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Airwallex was created in 2015 in Melbourne, Australia by five co-founders. At the time, software engineer Jack Zhang and architect Max Li had invested in a coffee shop in Melbourne, and were finding cross-border payments for imports to be costly and time-consuming for a small company.[5] Zhang was involved in designing the digital forex trading platforms for the National Australia Bank (NAB) and Australia and New Zealand Banking Group Limited (ANZ),[10] and was inspired to provide a simple, cheaper service to small and midsize businesses.[5] Zhang and Li partnered with Lucy Liu and Xijing Dai, fellow alumni from the University of Melbourne, as well as Ki-Lok Wong. With the founders investing a combined $1 million,[11] roles included Zhang as CEO,[7] Liu as president,[5] Li as head of design, Dai as chief technology officer, and Wong as principal architect.[7]

The Airwallex platform was developed to lower consumer costs on foreign exchange rates,[11] and was launched in a closed beta trial stage in 2015.[12] The company built a proprietary network with banks, such as Standard Chartered, DBS Bank and the Industrial and Commercial Bank of China, to handle local transactions.[5] ANZ began providing transactional services to Airwallex in 2017,[13] with both MasterCard's Send platform and Tencent's WeRemit service powered by Airwallex.[14] In 2018, Airwallex moved its headquarters from Melbourne to Hong Kong[5] and turned down a US$1 billion acquisition bid by Stripe.[13] Airwallex closed the "second-largest fundraising round in Australian start-up history" in July 2018, netting $80 million.[15]

International expansion (2019–2020)

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After a round of funding in March 2019 brought in $100 million from investors such as DST Global, Sequoia Capital, and Hillhouse Capital,[5] Airwallex reached a valuation of US$1 billion,[16] and became the "quickest company in Australia to reach unicorn status,"[17] as well as Australia's third technology unicorn overall.[8] Press reported in February 2020 that instead of focusing largely on forex transfers, Airwallex was aiming to become a "neobank" akin to Salesforce, specifically the "AWS of financial services."[18] In 2020, NAB was providing payroll and rental payment services to Airwallex.[19] The NAB had previously cancelled transactional banking services for Airwallex customers in 2018.[19][20] In 2021, Hong Kong unfroze $18.2 million in funds and released them to Airwallex[21] after Hong Kong's High Court dismissed suspicions[17] by the Hong Kong Police Organised and Serious Crimes Ordinance[17] that two former Airwallex clients had used Airwallex for money laundering.[17][22]

Recent developments (2021-2024)

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In May 2021, Airwallex received a license in the Netherlands, giving them access to the European market.[23] Airwallex started operations in the US in August,[24] and secured a license in Malaysia in September 2021.[25] In November 2021, Airwallex raised an additional US$100 million, reaching a new valuation of $5.5 billion and bringing the total funds raised since 2015 to $802 million.[26] In late 2021 it had 1000 employees in 19 locations.[27] The company processed $20 billion at an annualized volume in 2021,[28][29] and by 2022, that had increased to $50 billion processed in annualized transactions.[30] Airwallex released a debit card with Visa in Hong Kong in 2021,[31] followed by a release in the U.S. in 2022.[32] Airwallex launched in Singapore in early 2022.[33] In Oct. 2022, Airwallex raised another US$100 million as part of its Series E funding round, sustaining its estimated valuation of US$5.5 bln.[6] CRN valued it at US$5.6 billion in Oct. 2022.[34]

In Mar. 2023,[35] Airwallex secured a third-party payment license in China through the acquisition of Guangzhou Shangwutong Network Technology, becoming only the second foreign company to have secured the license after PayPal.[36] As of Aug. 2023, key markets included Singapore, Malaysia, Australia, the United Kingdom, the United States, the European Union, and Hong Kong. Also in 2023, Airwallex launched into Israel[37] and Canada.[38] In October 2023, Airwallex acquired a Mexico-based payments company, MexPago. The deal was made to help the firm expand its footprint in Latin America.[39] Currently based in Singapore,[1] Airwallex has a total of 20 locations[9] and most recently had 1400 employees.[34]

In 2024, Airwallex achieved an annual revenue run rate of $500 million and is preparing for an initial public offering by 2026. The company is developing AI tools to cut costs.[40]

Products and services

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Airwallex states its financial platform for businesses has features related to payments, treasury, spend management, and embedded finance.[41]

Airwallex uses a proprietary banking network to handle local transactions, with machine learning[5] in its SaaS products "[enabling] customers to... send money through local and international clearing networks" in around 130 countries.[2] Beyond forex services, other services include online payments acceptance, bank accounts, borderless cards, and a suite of application programming interfaces (APIs).[7][42]

According to the company, as of 2023 its software infrastructure is used by 100,000 businesses[41] including brands such as Navan, Qantas, SHEIN,[9] HubSpot, GOAT,[30] Saturday Club,[43] and Brex. Others in Australia and New Zealand have included Culture Kings, Kogan, Freelancer.com, and Camilla,[34] while Israeli firms include PAPAYA Global and OurCrowd.[9]

References

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  1. ^ a b c "From banking giants to lending up-and-comers — here are the world's top 200 fintech companies". CNBC. 2 August 2023.
  2. ^ a b "Coffee cup dilemma leads to Australia's latest $1b tech unicorn", Cara Waters (26 Mar 2019), Sydney Morning Herald. Retrieved 20 May 2022.
  3. ^ "Airwallex aims to upend global payments system", Henny Sender (7 July 2020), Financial Times. Retrieved 20 May 2022.
  4. ^ "Airwallex and Plaid partner on payments". Finextra Research. 2022-12-08. Retrieved 2022-12-09.
  5. ^ a b c d e f g h "Fintech unicorn rewrites forex rules to snag big bank profits", Michelle Chan (7 June 2019), Nikkei Asia. Retrieved 20 May 2022.
  6. ^ a b "In a tough market, Airwallex raises a second $100m Series e extension". 11 October 2022.
  7. ^ a b c d "How a career break and coffee turned into a $3.4b business", Yolanda Redrup (26 March 2021), Australian Financial Review. Retrieved 20 May 2022.
  8. ^ a b "Airwallex Becomes Australia's Third Tech Unicorn", 26 March 2019, Bloomberg Daybreak. Retrieved 20 May 2022.
  9. ^ a b c d "Fintech Airwallex opens Israel office to expand footprint in Middle East". Retrieved 2024-04-05.
  10. ^ "The Journey of Four Chinese Students Who Founded Australia's Newest Tech Unicorn", Nidhi Singh (26 March 2019), Entrepreneur. Retrieved 20 May 2022.
  11. ^ a b "How a coffee shop business turned into Australia's fastest-growing $1 billion start-up", Karen Gilchrist (29 July 2019), CNBC. Retrieved 20 May 2022.
  12. ^ Russell, John (8 July 2016). "Asia Pacific cross-border payment startup Airwallex lands $3M". www.techcrunch.com. Retrieved 19 September 2022.
  13. ^ a b "Payments 'unicorn' Airwallex knocked back $1b offer from Stripe", Charlotte Grieve (26 April 2021), Sydney Morning Herald. Retrieved 20 May 2022.
  14. ^ Russell, Jon (15 December 2017). "Australia's Airwallex raises $6M to grow its cross-border payment business". www.techcrunch.com. Tech Crunch. Retrieved 19 September 2022.
  15. ^ Bailey, Michael. "Airwallex in the money with $108m raise". Australian Financial Review. The Australian Financial Review. Retrieved 22 September 2022.
  16. ^ "Airwallex is Australia's latest unicorn", Derek Rose (26 March 2019), News.com. Retrieved 20 May 2022.
  17. ^ a b c d "Police freeze $26m of Aussie tech unicorn's funds after alleged fraud", Cara Waters (23 Dec 2019), Sydney Morning Herald. Retrieved 20 May 2022.
  18. ^ Redrup, Yolanda. "Airwallex launches 'borderless' card". Australian Financial Review. The Australian Financial Review. Retrieved 20 September 2022.
  19. ^ a b "'Denied': NAB, Citi pulled banking services from fintech unicorn Airwallex over risk fears", Charlotte Grieve (14 April 2021), Sydney Morning Herald. Retrieved 20 May 2022.
  20. ^ "Airwallex banks with ANZ, despite NAB and Citi rejection", Charlotte Grieve (15 April 2021), Sydney Morning Herald. Retrieved 20 May 2022.
  21. ^ Waters, Cara. "Atlassian co-founder backs Airwallex as it raises another $56m". www.smh.com.au. Retrieved 20 September 2022.
  22. ^ "Airwallex has $26m frozen by Hong Kong police in fraud probe", Lucas Baird (24 Dec 2019), Australian Financial Review. Retrieved 20 May 2022.
  23. ^ "Airwallex secures EMI licence from the Dutch Central Bank". www.thepaypers.com. The Paypers. Retrieved 20 September 2022.
  24. ^ "Airwallex Raises Funds at $4 Billion Valuation for Expansion", Lulu Yilun Chen (20 Sep 2021), Bloomberg Quint. Retrieved 20 May 2022.
  25. ^ MOSQUEDA JR., Mars W. "Fintech unicorn Airwallex hits $4bn valuation after raising $200m". Nikkei. Retrieved 20 September 2022.
  26. ^ Jennings, Ralph (2021-11-19). "Hong Kong Fintech Startup Airwallex Raises Another Nine Figures In Funding". Forbes. Retrieved 22 September 2022.
  27. ^ "Li Ka-shing and Tencent-backed Airwallex's valuation swells to US$5.5 billion after latest funding round", Chad Bray (18 November 2021), South China Morning Post. Retrieved 20 May 2022.
  28. ^ "Wave of global unicorns': Airwallex hits $5.5 billion valuation", Cara Waters (20 September 2021), The Age. Retrieved 20 May 2022.
  29. ^ "Airwallex closes Series E with USD 100 mln raise". thepaypers.com. Retrieved 2022-12-09.
  30. ^ a b "Airwallex raises $100M to power cross-border business banking, valuation stays flat at $5.5B". 11 October 2022.
  31. ^ "Airwallex to introduce new virtual payment card for businesses in Hong Kong as rivalry intensifies", Chad Bray (10 June 2021), South China Morning Post. Retrieved 20 May 2022.
  32. ^ "FinTech Airwallex Debuts Multicurrency Virtual Business Cards in US". www.pymnts.com. Payments TV. Retrieved 20 September 2022.
  33. ^ MOSQUEDA Jr., Mars W. "Fintech unicorn Airwallex launches in Singapore, eyes SE Asia expansion". Deal Street Asia. Nikkei. Retrieved 20 September 2022.
  34. ^ a b c "Airwallex ANZ sees 115 per cent revenue increase".
  35. ^ "Tencent-backed Airwallex secures e-payment license in China". Retrieved 2024-04-05.
  36. ^ Ziang, Guo (April 27, 2023). "Australia's Airwallex to Start Offering Direct Online Payment Services in China, Senior Executive Says". yicaiglobal.com. Retrieved 2024-05-31.
  37. ^ "Tencent-backed Airwallex's Singapore unit gets fresh $165m".
  38. ^ "Airwallex rolls out global payments in Canada".
  39. ^ Browne, Ryan (2023-10-19). "As U.S.-China tensions rumble on, fintech unicorn Airwallex pushes into Latin America with Mexico deal". CNBC. Retrieved 2023-10-19.
  40. ^ Browne, Ryan (15 Aug 2024). "Tencent-backed Airwallex hits $500 million annualized sales, aims to get IPO-ready by 2026". CNBC.
  41. ^ a b ""Airwallex for Startups" launches in Hong Kong to help local businesses streamline operations". airwallex.com. 6 September 2023. Retrieved 2024-05-31.
  42. ^ Webber, Daniel. "Airwallex: Building A Cross-Border Payments Infrastructure For Global Business". Forbes. Retrieved 2022-12-09.
  43. ^ Lim, Clay (10 July 2023). "Global payments firm Airwallex aims to double S'pore headcount by year end". The Straits Times.
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