Airwallex raises $100M to power cross-border business banking, valuation stays flat at $5.5B

Many companies still need to do business internationally even though the economy is contracting. A startup that makes and manages transactions is announcing some funding. Airwallex, the Hong Kong/Australia startup that provides cross-border banking and other financial services for businesses, has raised $100 million, money that it will use to continue expanding its business operationally, geographically and with new products in areas like credit and expense management

The funding is coming in the form of an extension to Airwallex's Series E, after a $100 million extension in November 2021. The round was mostly an inside one with previous backers Square Peg, Salesforce Venture, Sequoia Capital China, Lone Pine Capital, Hermitage Capital, 1835iVentures and Tencent all participating.

Business has been up in the last year according to the CEO of Airwallex who co-founded the company with four other people. He said that the company's revenues have grown by 184%), ARR passed $200 million in September, and it's processing close to $50 billion in transactions annually. The number of customers has doubled, although the figure is only described as a vague "tens of thousands" of businesses.

This round was not without its difficulties. It is coming in at a flat valuation of $5.5 billion, which is the same as it was a year ago.

It has been more difficult to raise funds. He said that Airwallex had $600 million in the bank, out of the total $900 million raised as of the end of September, but that he and others on the team could see what was coming around the corner.

He said that last year it took two weeks to raise 100 million dollars. Four months is how long it took this year. It was a good result that we were able to raise the money. I mentioned last time that Airwallex was going into its Series E extension having fended off two acquisitions. I wonder if Airwallex asks its investors if staying independent was a good choice.

The company is growing on its own steam. Airwallex is focused on two areas at the moment. Money transfer, payment cards, expenses management, and B2B payment links are covered in business banking. The platform product is a set of financial services that customers can integrate into their own platforms or websites by way of an application programming interface. Online payments, treasury services, foreign exchange and payouts are included.

Airwallex made a lot of noise when it was founded because it did the right thing at the right time, integrating with lots of banks and making them easy to use.

In the last six years, we have built more than 50 bank integrations and now offer payments across 95 countries through a partner network, according toZhang. He said it moved on to bank accounts, card issuance, and eventually building an end- to-end payment stack.

Businesses that were already digital saw transactions go through the roof when in the absence of in- person activity and people carrying out more aspects of their work and leisure life online.

As the world slowly reverted back to pre-pandemic habits and processes, the big question was whether those shifts would remain. Airwallex's growth seems to point to more opportunity ahead, but not at the rates that it would have projected a year ago

China, the U.K. and North America are the company's most active markets. Every single startup there is a potential customer and Israel is one of those countries that has international operations for businesses with a digital angle. It is a hot spot for potential acquisition targets since it is more difficult for smaller companies to raise funds.

Fraud protection is one area where Airwallex doesn't have a native solution, and where Israel is strong.

The space is an M&A perspective.

Airwallex's founders have been building out another venture to fuel their business growth, an investment fund, in addition to building their own business. Capital 49 was launched in July of 2011. Capital 49 uses Airwallex's knowledge of the product to tap a number of Airwallex's investors as partners.

The primary goal of the fund is to back interesting startups in those areas powered by Airwallex.