Melbourne-based fintech startup Airwallex has raised $3 million (AU$4 million) in a pre-Series A investment round, which it will allocate towards building its Melbourne and Chinese development teams, and accelerate research and development for its cross-border payments platform.
The payments platform has been designed to allow businesses to issue and pay invoices in their preferred currency at the mid-market rate. Airwallex claimed the platform, which has been designed using a peer-to-peer algorithmic engine, will help businesses avoid inflated bank margins and currency fluctuation risks.
The investment round was led by Shanghai-based venture capital Gobi Partners, which is also the investment manager of Alibaba's venture capital fund, Alibaba Entrepreneur Fund. Other backers included angel investors Huashan Capital One and Easylink Payments CEO Billy Tam. The company is also backed by Beijing-based Gravity Ventures.
According to the company, it will use the funds to develop the technology stack of its Airwallex payments platform, which is currently in beta stage, and roll out new features, including a multi-currency digital wallet and APIs for ecommerce platforms, over the next few months.
Airwallex co-founder and CEO Jack Zhang, who is also a former ANZ and National Australia Bank (NAB) foreign exchange solution designer, said the cross-border payments market has huge market potential given the growth of international ecommerce, travel, and import and export trade businesses.
"Current cross-border payment processes are expensive, clunky, and time consuming. It can take days for the money to reach its destination and the transfer and foreign exchange fees are excessive and often prohibitive to SMEs," Zhang said.
"Airwalllex breaks down these barriers to empower businesses to build stronger global trading partnerships and truly tackle the world stage."
Last week, NAB chief executive Andrew Thorburn said the bank needs to make faster, bigger, and better changes, and believes it can do this by adopting the same hunger as fintech companies.
"Fintech companies -- the smaller, emerging ones -- they're hungry, they want to make an impact, they find an opportunity, and they go after it. And that's the sort of hunger we need inside our own company," he said.
"They should be respected, but not feared."
In May, a joint report released by KPMG and CB Insights revealed funds raised by venture capital-backed fintech companies in Asia climbed to $2.6 billion in the first quarter of 2016, up from $500 million in the previous quarter.
The report revealed the significant increase was fuelled by a couple of "mega" funding rounds, comprising at least $1 billion, which went to China's JD Finance and Lu.com.
Across the globe, investments in private fintech companies reached $5.7 billion in the first quarter. This included $4.9 billion, which went to VC-backed fintech companies across 218 deals, the report stated, representing a 96 percent increase over the same quarter in 2015.