Airwallex rings up US$80 million from Tencent and Sequoia
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The Melbourne-based startup announced today a US$80 million series B led by Tencent and Sequoia China and joined by Asia-Pacific investors Hillhouse Capital, Horizons Ventures, Central Capital Ventura, and Square Peg Capital.
The deal is believed to be the second largest in the country, and is the largest raised by a startup in Australia this year.
Airwallex provides cross-border transactions and money transfers.
It will use the funding to expand in Southeast Asia, starting out with Singapore and Hong Kong.
Airwallex co-founder and chief operating officer Lucy Liu said that some banks had technology that constrained their ability to deal with new payments possibilities, and that it therefore needed to have funds to build its own solutions in some cases.
“The user interface and user experience will only get us far, so with this round we’ll be looking for more licences in key banking areas, either via acquisition or applying for our own,” Ms Liu said.
“The regulatory deposits required for this are one of the reasons we’ve raised so much.”
For instance, Ms Liu said Airwallex would consider a virtual banking licence in Hong Kong, with “financial inclusion” of small-to-medium enterprises throughout the region an aim.
“So many SMEs, including in Australia, are trying to grow internationally but are hit by barriers around payments and foreign exchange,” she said.
Questions & Answers
Q.What is Airwallex's core business offering?
What is Airwallex's core business offering?
Airwallex specialises in facilitating cross-border transactions and money transfers. Their service aims to help businesses overcome barriers related to international payments and foreign exchange, particularly for small to medium enterprises.
Q.How will Airwallex use the recently secured US$80 million funding?
How will Airwallex use the recently secured US$80 million funding?
The funding will be primarily used for expansion into Southeast Asia, beginning with Singapore and Hong Kong. Airwallex also plans to acquire more licences in key banking areas, either through acquisition or applying for their own.
Q.Why does Airwallex need to raise such a large amount of capital?
Why does Airwallex need to raise such a large amount of capital?
A significant reason for the substantial funding round is the need for regulatory deposits, which are required to obtain new licences in key banking areas. Building their own technology solutions where banks' systems are limited also requires capital.
Q.Which specific investors participated in this funding round?
Which specific investors participated in this funding round?
The Series B funding round was led by Tencent and Sequoia China. Additional investors included Asia-Pacific firms Hillhouse Capital, Horizons Ventures, Central Capital Ventura, and Square Peg Capital.
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