A unicorn twice over: Airwallex closes $250 million Series D round, despite the global COVID-19 crisis

Aussie fintech Airwallex has closed a massive $250 million Series D round, making it a unicorn almost three times over, with a valuation of $2.85 billion.

The round included existing investors Tencent, Sequoia Capital China, Hillhouse Capital, Horizons Ventures and DST Global, as well as new backers Salesforce Ventures and ANZ investment arm ANZi Ventures.

Founded in Melbourne in 2015 by Lucy Liu, Jack Zhang, Max Li and Xijing Dai, Airwallex cracked the unicorn club in March last year with its $141 million Series C raise.

But, times have changed since then. In April 2020, you can’t talk about a whopping funding round without also acknowledging it’s come in the middle of the COVID-19 pandemic that’s causing economic chaos all over the world.

Speaking to SmartCompany, Liu doesn’t reveal any revenue growth figures, but says since the Series C round Airwallex has seen “extraordinary growth”, both in terms of its global coverage and its product offering.

“The timing is right for us to raise more money, to accelerate that growth.”

A deal of this size is not made in a matter of weeks, or even months, and Liu says most of the travelling and main investor meetings were done and dusted before the lockdowns.

The fact that the round is backed largely by existing investors was also a benefit during this time of economic uncertainty.

Even so, “we were worried for a while, especially during February,” Liu says.

“But, because the conversations happened a lot earlier and most of the deal-related key factors were already decided, we’re quite fortunate that we were able to close, even during COVID-19,” she explains.

“Towards the end, it was really just about the transactional details and the paperwork.”

The team also did some COVID-19 forecasting, for internal use and to share with investors.

“We still believe this is temporary, even if there is any effect on the business,” Liu explains.

“There will always be alternative ways of going about what we’re doing,” she adds.

“I think it wasn’t a major factor in their decision-making.”

Changing behaviour

At its heart, Airwallex is a payments platform for small businesses. So Liu has understandably been keeping a close eye on what the COVID-19 pandemic means for the small businesses the startup serves.

“Obviously it comes with a lot of challenges, especially in e-commerce and the online travel space,” she explains.

“But if you look at e-commerce, it hasn’t slowed down as much, because most of the merchants still have stock to sell.”

However, factories in China have been shut down for some time now, and others around the world have followed suit.

“I think the supply chain will have some effect on how e-commerce as a sector performs over the next six to 12 months, just because the merchants don’t have anything to sell,” she explains.

At the same time, logistics is slowing down — planes are being cancelled, orders are not being accepted, and customs processes are running more slowly.

“It will be interesting to see how the sector can recover,” she says.

But, she’s also seeing emerging trends and new opportunities, in the digital space for example.

“People are more active online,” she says.

People are being forced to adopt online education, and more and more people are playing games and communicating online.

After COVID-19, this activity may slow down a bit, she notes.

“But because people have been adopting that behaviour … I think it will still help the digital space.”

Cautiously optimistic

Airwallex is arguably in a good position to weather a crisis like this. It’s not exactly a fledgling startup anymore, and it has a presence all over the world already.

“We are a tech company,” Liu says.

“It’s not as challenging for us, compared to offline businesses.”

As for the growth plans the funding was pegged for, she says COVID-19 hasn’t meant any major changes. It is, however, affecting how much the founders can travel.

“Without travelling, a lot of the enterprise sales or partnerships are being slowed down,” Liu explains.

The team is doing as much as it can through Zoom and other alternative communication channels, and even though the expansion may be a little slower than originally anticipated, “we do still have quite ambitious plans for this year,” she adds.

Liu is very aware of the effect the spread of the virus is having on other businesses and industries. While Airwallex is feeling the effects in a way, she’s feeling fortunate.

“We have clients in multiple verticals, and luckily we have a diversified portfolio of clients,” she says.

“We’re also looking at industries that do present opportunities,” she adds.

“We currently have an optimistic but cautious strategy around this.”

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