We spoke to Airwallex’s Co-Founder and President Lucy Liu this week to discuss their recent raise of $160m, upping their unicorn valuation to $1.8bn (from $1bn at the last raise).
Airwallex experienced substantial growth in 2019 and plans to accelerate it with the current funding round (as well as providing a buffer for what will be a challenging 2020).
The main takeaways from our discussion:
- Growth will come from two dimensions
Geographic and product expansion. In terms of geographies, the company wants to reach a wider global coverage, reinforcing its anchor in the APAC region and boosting investments in Europe and the US. In product development, Airwallex will be launching an acquiring solution for the settlement of both card and wallet payments in the next months, and is also considering the launch of a physical payment card.
- A path to building a cross-border payments infrastructure
Platform plays are now hot. Airwallex’s top priority is to build its payment infrastructure on top of the SME offering, similar to what TransferWise and Nium have done. In Lucy’s words: “Most of the focus is on the infrastructure side. We actually think we add more value by building or connecting to the local settlement systems and by improving FX pricing.”
- New customers and new partnerships ahead
Fintech startups and boutique banks are the segments that are likely to see more value in Airwallex’s infrastructure, since they will be able to build their own applications on top of that. We can also expect to see Airwallex establishing more partnerships in its attempt to offer “a more end-to-end and holistic experience to customers”.
- Covid-19 may shift volume across industries
Airwallex, much like the rest of the industry, has seen its trading volume decrease due to Covid-19. Some of the industries it serves, like e-commerce, have been severely disrupted by the virus outbreak. The recovery of the impacted sectors depends on how quickly restrictions around the world are lifted and when trade goes back to normal. Revenue for other sectors, like online education, experienced an uptick instead, since people spend more time at home.
How successful will Airwallex be at entering the increasingly competitive world of (local) payment infrastructure? Without a doubt, $160m of extra firepower will go a long way to giving it a shot.