Fresh from completing a US$100 million capital raising that valued Airwallex at US$2.6 billion, co-founder and president Lucy Liu sat down with InFinance to explore the future for the global funds transfer fintech.
Last year was a record year for product launches for Airwallex. This year, Liu says the businesses is going to use its new investment funds to continue building its product suite.
“We have lots more exciting APIs and services in the pipeline, including a physical counterpart to our virtual multi-currency Visa card and digital wallet integrations.”
Liu says the money that has just been raised will also play an important role in the fintech unicorn’s global expansion plans.
“Alongside strengthening our existing presence across Asia Pacific and the UK and Europe, we’re also laying the groundwork to enter the US market this year, which is extremely exciting.”
The future for payment fintechs
Of all the fintech subsectors, payments is among the most competitive but also the most challenged. This is because it can be hard to compete with big banks with their network effect producing such a pronounced competitive advantage.
According to KPMG’s 2020 Australian fintech landscape report, the number of payment fintechs in the local market rose from 143 in 2019 to 151 last year, a five per cent increase.
By contrast, the number of neobanks in the market rose by 100 per cent and the number of blockchain fintechs rose by 100 per cent.
Liu says fintechs of every type have to be part of the post-COVID period.
“Digitisation and the shift online is more pronounced than ever. Fintechs are going to underpin the growth of every business and the national economic recovery.
“Many companies are looking to expand into international markets to keep their head above water. Businesses that are pursuing this strategy need to establish overseas bank accounts. These companies need companies like Airwallex to connect to new markets and grow their businesses.”
All about the numbers
Liu says the support of investors along the Airwallex journey has been instrumental to its success. In particular, it relied on investors support to build scalable and viable infrastructure to underpin the company.
“We’ve been able to attract investors because they believe in our future outlook, longevity and purpose. It’s not enough these days for a business to have a profitable idea or concept. You need to be able to clearly articulate your value to your industry and your customers.”
Airwallex has raised more than US$500 million so far, proving there is investor appetite for payments fintechs.
Says Liu: “We’ve been extremely fortunate to have investors return for multiple rounds and to also be able to attract new investors.” For example, US-based investment firm Greenoaks led its latest Series D round.
When quizzed on opportunities for consolidation in the payments fintechs space, Liu says her focus is on collaboration. For instance, Airwallex has a partnership with Visa that combines the credit card’s network with Airwallex’s cross-border, B2B payments capabilities to offer businesses a multi-currency, virtual debit card.
“Partnerships have been extremely valuable in helping our business increase its global exposure and create products that fulfil customer needs. As businesses now operate with an increasingly integrated arsenal of technology, plugging into the existing solutions they already have is a priority.”
Liu was recently awarded the 2021 Faculty of Business and Economics Alumni of Distinction Rising Star for Young Alumni Award by the University of Melbourne. Her advice to aspiring fintech founders is to think big.
“Most business owners start out to resolve a very specific issue or challenge. This was the case for Airwallex. The business was created to reduce the cost of international transaction fees. We have since grown our product suite to create a more efficient and affordable way of doing global business. The message from this is, the bigger the problem space, the larger the opportunity to build your products and market share.”
