Cross-border payments startup Airwallex has received a US$6 million investment from VC firm Square Peg, bringing its total Series A capital raise to US$19 million
The Melbourne-based fintech company previously closed its Series A funding round in May, having raised a combined US$13 million from Mastercard, Sequoia Capital China and the world’s fourth largest internet company, Tencent Holdings. The top-up Series A investment from Square Peg comes in the wake of Airwallex’s debut on the coveted Fintech100 list last month. Prior to 2017, Airwallex had secured US$3 million in pre-Series A funding from Gobi Partners.
In conversation with Dynamic Business, Co-founder and CEO Jack Zhang explained why Square Peg is a “great cultural fit” for Airwallex. He also discussed his plans for the additional Series A funding and the vision that has fuelled his startup’s success.
DB: How did the deal with Square Peg come about?
Zhang: We weren’t actively seeking additional funding for Airwallex; rather, an opportunity to partner with Square Peg – one of the biggest and best VCs in the Australian market – presented itself and it was just too good to pass up. It followed a coffee catch up with Ben (Hensman, investor, Square Peg). We talked shop and he was impressed by the mechanics behind our business. Of course, Square Peg’s proven track record of fostering growth in start-ups from the early days into multi-million dollar global businesses speaks for itself. From there, the conversations moved into how our two operations could partner. The announcement of the funding is the final result of that. As a start-up, we’re always open to additional investment with the right partners. We have big plans and it’s funding that will assist us in rolling those out.
DB: How will you be investing the additional funding?
Zhang: First, some context – the problem that Airwallex is solving is a large scale, global problem. We see that cross-border payments, which are so integral to so many businesses, are currently a hindrance to doing good business and also to profit. There’s an almost endless runway of opportunity particularly in the Asian corridor that has traditionally been neglected by providers when it comes to servicing FX and payments needs. So, the additional investment from Square Peg will further our expansion, enabling us to enter more markets faster, which is essential to offering a truly global payment solution.
DB: What makes Square Peg a good fit for Airwallex?
Zhang: We have a great cultural fit because their mission is very aligned to our vision – you couldn’t make it up. Square Peg are driven by a passion for technology and its potential to change our world and that’s exactly what we believe with Airwallex… by making international payments as simple, fast and affordable as domestic payments, we’ll inspire growth and success for global businesses. Plus, they related not only to our presence in China but our commitment to our home region.
They’re excited to be part of the company that’s solving the problem we’re solving, and they can see from the pedigree of the Airwallex team – including our backgrounds in banking and finance across various institutions – that we have the expertise to actually deliver. From their perspective, they see great potential in our scalability and this is where they’ll come to the table – to assist in unlocking that growth more quickly than we’d possibly be able to otherwise through their own understanding of the space.
DB: How do you account for the startup’s success this year?
Zhang: I think a great deal of our success is due to the business’ vision, and it’s that vision that has enabled us to reach our first set of key milestones and goals. We set ourselves a range of goals including the likes of funding, who we’d like to partner with, and the direction we want to take the business in. We’re very lucky that with big name early investors on board, it’s becoming increasingly obvious to others in the payments space that what we’re doing – and what we’re trying to achieve – is not only relevant, but necessary.
I’ve been quoted as saying that payments have been stuck in the Stone Age, and I stand by that. We’re living, working, shopping, and transacting in the internet era… so why should our international business payments not be seamless as well? Airwallex works relentlessly to deliver best-in-class technology in ways and places that may have been deemed ‘too hard’ in the past. It’s these types successes that we really pride ourselves on.
Breaking into the Fintech100 was a great acknowledgement of what we’ve achieved in only two years. It’s a brilliant to see so many fantastic fin-techs solving real business and consumer problems – we felt honoured to be in such good company.
Related: Airwallex’s CEO reveals how his fintech start-up earned a ‘vote of confidence’ worth US$16m, Australia has ten Fintechs inside the top 100, LaunchVic snapshot reveals $790 million has been raised by 385 startups over five years and The Chinese market ‘dances to the beat of its own drum’: how SME exporters can succeed.