To be sure, Airwallex has some impressive numbers that it highlights as proof of its success. First, it has a valuation of US$5.5 billion and has raised over US$900 million from the likes of Salesforce Ventures, Sequoia, Tencent, Square Peg, Lone Pine Capital and 1835i. Second, the company has processed more than US$50 billion in annualized transaction volume, while its revenue has doubled on an annual basis – though it does not say by how much. Third, Airwallex is present in 20 locations globally and has a team of 1,300 employees that it plans to grow by an additional 500 by year end – that is self-proclaimed “exponential growth.”
One of the reasons investors like Airwallex is that in contrast to many fintechs, it has a clear scalable niche to which it has stuck: providing cross-border payment services for small and medium sized enterprises. The company has stayed true to this strategy despite some noticeable changes in branding that showed it to be both adaptable and opportunistic. After all, when it sought ever bigger capital injections from VCs several years ago, it positioned itself as a challenger to SWIFT, a disruptor that would upend cross-border payments as we know them. But that positioning has evolved with the realization the situation is not so binary. Today, with the ascendancy of embedded finance, Airwallex says its on website that “embedded finance is a key component to any successful business in the modern world.”
It can be challenging to connect the dots between all the different Airwallex international expansion moves. In May, the company opened an office in Israel which it says will provide a regional base for expansion to other Middle Eastern countries, while noting its interest in cybersecurity acquisitions. Also that month, Airwallex announced that it would team up with the German payments firm MODIFI to facilitate cross-border payments and financing for Chinese exporters. The two companies will create a payment tool called Global Account Solutions that focuses on speeding up the working capital cycle and increasing profit margins for B2B exporters and e-commerce marketplace vendors in China.
In August, Airwallex’s Singapore unit received a fresh capital injection of US$165 million which will be used to expand its business there, while in October the Hong Kong-headquartered company said that it had signed a definitive agreement to acquire MexPago, a Mexico-based payment service provider and an Institution of Electronic Payment Funds (IFPE) license-holder. This acquisition will likely help Airwallex expand its financial infrastructure into Latin America, a market with tremendous potential for fintechs and in great need of financial inclusion. Airwallex described the acquisition as a key part of its “broader growth strategy in the Americas, where the company has seen more than 460% YOY revenue growth.”
We will be carefully watching to see if Airwallex can deliver a triumphant exit to investors. The company has more often than not swung for the fences, and it needs a blockbuster IPO to justify its US$5.5 billion valuation and consistently grandiose messaging. An edifying report in the Australian Financial Review published in early October noted that Airwallex has long sought to go public, and as far back as 2021 was telling employees that listing was just three or four years away. Last year, the company had a team working towards a potential initial public offering, either on the Hong Kong Stock Exchange or in the United States.
It is unclear at what stage Airwallex’s IPOs plans are now, but we imagine that the company will wait for more favorable market conditions, and may also be cautious about going public before having reached profitability.