A new Melbourne, Australia based Fintech startup that has echoes of peer-to-peer money transfer service Transferwise but with more focus on the B2B market, has completed a USD$13 million Series A investment from Tencent, the company that owns China’s most popular social networking and now payments app, WeChat.
Tencent led the investment round into Airwallex, but were also joined by Silicon Valley based Sequoia Capital, one of the most prestigious and oldest VC investors, Mastercard, and several other unnamed backers.
Airwallex, founded in 2016 and led by CEO Jack Zhang, targets businesses, giving them a platform from which to make international payments at lower rates than are traditionally offered in the market, with more transparency and lower fees, and greater convenience for the user.
Zhang has revealed that, similarly to Transferwise founder Taavet Hinrickus, who started the company after being piqued by the fees he was charged to send money from his home in London to his country of origin Estonia, he was inspired to found Airwallex after ordering a shipment of paper cups and being “shocked at how badly we were getting fleeced on the foreign exchange rate and fees”.
After raising a $3 million seed round last year, the company, which makes a profit by taking a small percentage fee for each transaction it carries out, but may consider a mass-payout in the future, has quickly built up a large user base.
Says Zhang: We’ve made settlement and reconciliation very easy but our customers can also enjoy institutional FX prices to save a lot of money”.
“We can access the most competitive pricing in the world to facilitate traditional retailers that don’t enjoy that sort of rate.”
The beauty of this most recent investment round is that it will give Airwallex access to Tencent’s WeChat Pay platform, giving it the ability to reach millions of businesses looking for alternative ways to move money abroad. This has become a hot topic in China, where the government are cracking down on international money transfers by businesses, to try to encourage firms to invest more domestically.
“It makes sense to take strategic investment from Tencent because the WeChat ecosystem and WeChat Pay is a big deal”, says Zhang; “the internationalisation will be interesting in the next couple of years, so we want to prepare ourselves for that expansion.”
The Money Cloud View
This is clearly a huge win for Airwallex and we must congratulate them on a great service. Being part of the WeChat Pay platform is the holy grail for startup payments companies in Asia, and indeed, as the service begins making inroads there, Europe and the rest of the world. There is no other service quite like WeChat, where so much can be accomplished in-app.
To see the best rates for sending money abroad, visit The Money Cloud.