Fintech Company Airwallex defies the industry downturn, backing a $6.2 billion gamble on international payment solutions.
Australian fintech startup Airwallex, headquartered in Singapore but originally from Australia, raised $300 million in funding on May 21 at a valuation of $6.2 billion. This news came as a surprise to many observers, given the current deep freeze in venture investment into fintech, which has seen banking tech deals plummet 72% year-on-year in the March quarter.
Yet Airwallex, a specialist in cross-border payments, managed to secure this funding despite the challenging environment. The round, which was half secondary and half primary, saw participation from a syndicate that included DST Global, Lone Pine, and Square Peg.
The company is not the only cross-border payments startup bucking the funding winter trend. In the past fortnight, London-based Navro announced a Series B funding round of $41 million aimed at expanding its global FX stack, and OpenFX emerged from stealth with $23 million to build real-time rails for commercial marketplaces.
Cross-border payments, particularly B2B FX, remain attractive to investors, who view the sector as a fundamental plumbing business, not a cyclical sugar high. Investors have decided that helping companies shift money across borders is a necessary service, not a luxury.
There are several reasons why the cross-border payments niche defies gravity. Firstly, McKinsey's Global Payments Report projects that cross-border flows will reach $200 trillion by 2025, a 15% increase in just one year. B2B trade still makes up two-thirds of that. Even with a projected 5% compound annual growth rate through 2028, there is still a tremendous potential for fee income across the system. Unlike retail Buy Now Pay Later (BNPL), those flows are not optional; they keep global supply chains moving.
Secondly, cross-border players have a diversified corridor exposure, which hedges geopolitical risk better than single-market neobanks. Airwallex's latest numbers show its gross profit in the Americas and Europe growing at a 250% compound annual growth rate over the past four years, while Asia remains its anchor.
Thirdly, companies integrate a provider's APIs into their treasury or marketplace stack rarely rip them out. Once Airwallex sits under Shein, Qantas, or Xero, switching costs soar. Net revenue retention north of 120% is commonplace, cushioning any macro wobble.
Fourthly, cross-border e-commerce, digital nomad payrolls, and real-time interlinkage initiatives like PayNow-DuitNow, PROMPT Pay, and InstaPay are permanent growth levers. Up to 65% of low-value international transfers have already migrated to non-traditional providers, even banks concede.
Airwallex's new valuation of $6.2 billion, equivalent to about 5.5 times its forecast $1 billion 2025 run-rate revenue, looks steep beside public-market comps like London-listed Wise, which trades at about 3 times forward revenue and a $11 billion market cap as of May 23. However, private investors seem willing to pay an "execution premium" for the faster-growing challenger, betting that it will eventually land above the peers once it monetizes adjacent services such as multi-currency credit and corporate cards.
While many late-stage fintechs face flat or down rounds, Airwallex sits in the privileged minority, capturing headlines beyond the payments clique. The company plans to use the fresh capital to expand into Japan, Korea, the UAE, and Latin America, while heavier investment will be made in an embedded-finance suite offering treasury, expense management, and credit services. The deal also includes $150 million in secondary share sales for early employees and angels, a move that suggests an IPO may still be 18-24 months away.
For customers, Airwallex's significant war chest translates into ever-thinner spreads. The company's annual transaction value already exceeds $130 billion, enabling it to amortize margin pressure across scale and maintain competitive pricing.
Cross-border infrastructure has become a utility, and utilities attract "flight-to-quality" capital when the rest of the market turns risk-off. While the broader fintech funding landscape is challenging, infrastructure-centric fintechs like Airwallex benefit from being less vulnerable to consumer sentiment shifts.
However, some challenges remain. These include navigating regulatory minefields in various jurisdictions, dealing with the rise of instant domestic rails, and timing the IPO. The 2025 window is crowded, and competition among VC-owned peers such as Nium, Stripe, and Rapyd may signal valuation discipline that private investors have so far postponed.
In conclusion, the success of Airwallex in raising significant funding during a fintech funding winter underscores the potential of cross-border payment specialists like Airwallex. These companies own the pipes through which global commerce flows and, for now, are indispensable, making them one of the safest bets in next-generation finance.
- Despite the current funding winter in the fintech industry, cross-border payments companies like Airwallex, specializing in B2B FX, continue to attract investors, as they view this sector as a fundamental plumbing business and not a cyclical sugar high.
- In the long run, investors are willing to pay an "execution premium" for faster-growing cross-border payment challengers like Airwallex, betting that they will eventually surpass their peers once they monetize adjacent services such as multi-currency credit and corporate cards.
