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Aussie forex disruptor one to watch

Airwallex foreign exchange fintechThe Melbourne-founded fintech has big expansion plans following its US$1b valuation…

Dubbing itself “the new way to create bank accounts globally, access interbank exchange rates and send funds to more than 130 countries,” Airwallex is an Australian company currently doing everything right in the cross-border payment – and fundraising – space.

Essentially, the company brings together foreign exchange services and payment tech to make cross-border payments faster. Instead of using the legacy SWIFT global payment network (created in the 1970s), the company has built its own proprietary network (consisting of some 50 international banking partners) to facilitate low-cost, high-speed international payment transfers.

Founded in 2015 by CEO Jack Zhang and four associates, the company offers high speed, simple money transfer tech, an idea, says Zhang, that came from experiencing a problem familiar to many small business owners.

“The growing e-commerce industry needs a technology-focused payments network that is reliable, cost-effective and provides data transparency.”

“We ordered lots of materials from overseas for the coffee shop we were running,” says Zhang.

“One transaction was US$15,000 and we had to pay US$600 in foreign exchange fees.

“We said: this doesn’t make sense. We can make foreign exchange much easier by innovating upon the underlying financial infrastructure.”

Three and a half years later Airwallex is a 260 employee-strong business which counts, Tencent, Ctrip and MasterCard among its clients.

“We started Airwallex because we knew there was a better way to make global payments,” says Zhang.

“Our mission is to build a worldwide, technology-driven financial infrastructure that will help our customers, including marketplaces, online sellers and SMEs, grow their businesses globally.”

Via a single know-your-customer check, Airwallex users can open local bank accounts in 50 different currencies almost instantly, as well as send and receive money internationally in real time at lower interbank rates, says the company.

The company is good at raising money – its series B funding round was the second biggest in Australian history at $US80m. Previous investors Sequoia Capital China, Tencent, Hillhouse Capital, Gobi Partners, Horizons Ventures and Square Peg Capital all returned for the Series C funding push, bringing the company’s total capital raised to over US$200m. The round was led by Hong Kong-based DST Global, known for funding late-stage ventures.

“The growing e-commerce industry needs a technology-focused payments network that is reliable, cost-effective and provides data transparency,” says Tom Stafford, managing partner at DST Global.

According to Airwallex, the funding will finance the expansion of its global footprint as well as new additions to its product range.

Last year the company was granted an Electronic Money Institution (EMI) license from the UK, allowing the company to integrate with European banks. The company plans to open a London office by the end of 2019.

Airwallex has relocated its headquarters to Hong Kong, but it still retains 60 staff in Australia, with plans to increase that number this year.

The valuation surprises few – the company has won a slew of awards in the last twelve months: Airwallex was named one of the top 50 Global Fintech Companies of 2018 by KPMG and this year won three trophies at FinTech Australia’s Finnies 2019 awards.

[image caption: Airwallex’s Xijing Dai, Max Zhang, Lucy Liu, and Max Li]

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