With a $3 million pre-launch round, Airwallex seems poised to hit the ground running
International transactions platform Airwallex announced a $3 million (AU$4.5 million) pre-launch round Tuesday, led by Gobi Partners.
Airwallex estimates so-called real exchange rates, (a.k.a. mid-market rates, spot rates or interbank rates), the midpoint between buy and sell prices for currency trades. The business is aiming for SMEs as their primary customers.
“Initially I didn’t think it was going to be that fast, we were planning for a few months,” CEO Jack Zhang told Australia’s StartupSmart, mentioning initial plans to fundraise in Silicon Valley were scuttled in favor of what turned out to be a quick mission to China.
The platform is apparently preparing to hit the ground running, with a lot of that money being invested in new hires in New Zealand, Singapore, Japan and the United Kingdom. Besides Gobi, investors included several angels and Gravity VC.
Alibaba-backed news site Alizila estimates cross-border e-commerce will be worth $1 trillion by 2020, up from $230 billion in 2014. It suffices to say that handling international transactions is major business, and getting enterprise clients favorable currency exchange rates even within fractions of a penny on the dollar is a big deal for would-be clientele.
A number of startups are popping up for wire transfers, from TransferWise in Estonia to Singapore-based InstaRem. But according to Zhang, it still hasn’t been picked up as a major business opportunity by would-be entrepreneurs.
“The major companies are the banks and a few big companies – PayPal is the big payments company but they’re not really focusing on cross-border transactions,” Zhang remarked to StartupSmart. “There’s nothing out there that helps SMEs when they’re trying to expand globally. They reach a bottleneck in Australia, want to sell in China and gets complicated with payments.”
Airwallex keeps its headquarters in Melbourne with operations in China.