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‘Digital businesses are the future’: Airwallex’s journey from café to one of Australia’s fastest growing fintech firms

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The pandemic has prompted an explosion of digital and global business services. Airwallex, an online business account for SMEs, has seen this surge in digital business first-hand.  

“A major shift in the way businesses operate from offline to online is something Airwallex predicted from our inception,” said Jack Zhang, CEO and Co-founder of Airwallex.

“However, 2020 has fast-tracked this transition in a way no one could have foreseen. Businesses are now racing to embrace digital transformation at an unprecedented rate. We are more certain than ever that the digital economy is going to be the centre of the world’s economic structure.”

Airwallex’s impressive growth is a testament to the digital revolution that is facing businesses.

It achieved “unicorn” status – a $1 bn valuation – last year. In Q3 2020, it experienced over a 100 per cent increase in net revenue after recruiting more than 140 staff in early 2020.

Last month, Airwallex closed their extended series D fundraising with an additional $US 40 mn after initially announcing $US 160 mn series D funding in April 2020.

To date, Airwallex has raised over $US 400 mn since it was founded in late 2015. This includes investments from Square Peg and Scott Farquhar’s Skip Capital.

 “From very early on we saw huge potential in Airwallex, and we’re excited to be returning as an investor in the company’s extended Series D round,” said Square Peg Capital Co-founder and Partner, Paul Bassat.

“2020 has fast-tracked the importance of the digital economy and Airwallex is at the forefront of this, driving efficiencies, ease and speed on cross-border payments. The hard work that the Airwallex team has put in towards building a global financial infrastructure in the last few years has paid off – today they are one of the best placed tech companies in the world to help businesses succeed in the new digital era.

“We’re proud to be one of their longest-standing partners, and we look forward to supporting them in the next stage of their growth journey.”

The genesis of this rapidly-growing company was a simple, yet universal, business issue.

Co-founders Jack Zhang and Max Li ran a cafe in Melbourne but were shouldering excessive banking costs to import coffee cups.

To surpass the inefficiencies in dealing with traditional banks, they founded Airwallex.  

“Early on, one of the main difficulties was getting traction,” said Neil Luo, Head of Growth at Airwallex.

“Jack made a decision to focus on China, where there’s a lot of opportunity. On the back of that, we’re now focusing on Australia and international markets and we’re growing quickly.”

The pandemic has also expanded their customer base as more industries require online and FX services.

“Businesses have two key problems: time and money. Generally, owners are short on time. Our set up is all online and can be approved quickly without needing to visit a branch. You can set up an overseas account in a click of a button,” said Mr Luo.

“From a money perspective we know cashflow is super important. We’re transparent and up to 90 per cent cheaper than the big banks when it comes to FX.”

Mr Luo also anticipates exciting opportunities for business-focused fintech firms.

“The big banks make up to 10-20 per cent of Australian GDP… In 5 to 10 years, I can’t imagine why there wouldn’t be another major player. I predict that the number 5 bank could be a fintech.”

True to its global vision, Airwallex is expanding its coverage to the Middle East, Eastern Europe and Africa. It has plans for market entry in the US in Q1 2021.

However Airwallex and other fintech firms are still driving for changes in consumer perceptions towards digital business.

“The biggest challenge is the perspective that fintech is risky,” said Mr Luo.

“People think fintech is risky, but our view is that sometimes the regulatory standards that fintechs have to meet are higher than other banks. So our view is that the perception that fintech is risky is unwarranted.”

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Ann Wen
Ann is a journalist at Dynamic Business.