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A Singapore fintech that was labelled a “Chinese backdoor” by a prominent tech investor has diluted its major Chinese shareholder and added a US headquarters as part of a fundraising round that values the business at $8bn.
Payments company Airwallex has made San Francisco its second headquarters, and the $330mn raised in the round will be used to expand its presence in Silicon Valley.
The company hopes to hire swaths of artificial intelligence engineers to improve its software and in the process double its US headcount to more than 400 people over the next year.
As part of the fundraising Tencent, its long-standing Chinese shareholder that participated in its 2016 seed round, has sold part of its stake to make way for US investors such as T Rowe Price and Robinhood Ventures.
Airwallex chief executive Jack Zhang told the Financial Times that Tencent, which also owns a stake in Monzo, now has a stake of “significantly less than 10 per cent”. A director appointed by Tencent also left the board recently.
Zhang said the latest fundraising was an “external validation from some of the most reputable US investors as we gear towards IPO in the next three to four years”.
Airwallex has a large presence in mainland China and Hong Kong, where it employs hundreds of staff.
Last week Keith Rabois, a prominent tech investor and former executive at PayPal, LinkedIn and Slide, accused the company of operating as a “Chinese backdoor” and allowing data to potentially be passed on to the authorities.
Airwallex said the claims were false. “We do not store our US customers’ personal data in China (including Hong Kong). This claim, surfaced on X, is intentionally misleading. We have strict internal controls and policies that specifically restrict US customers’ personal data from being accessed by employees in China or Hong Kong, as required by US laws.”
The payments company, which provides banking and multicurrency payment services for businesses such as racing group McLaren, was founded in Melbourne in 2015 but is now based in Singapore.
“From our company point of view there’s two outcomes in the next five to 10 years: either you become an AI native company or you become irrelevant. I don’t think there’s any third outcome,” Zhang said.
“All of this strategy — moving to San Francisco, having the new headquarters — is making sure that Airwallex is the leading company in the artificial intelligence race.”
Most AI innovation was happening in Silicon Valley, Zhang added.
Airwallex’s previous fundraising round was in May, when it raised $300mn at a $6.2bn valuation.
Despite Airwallex’s lofty ambitions, the latest $330mn fundraising comes as the world’s biggest technology companies spend trillions of dollars in a race to improve their own AI models.
Four tech groups alone — Alphabet, Amazon, Meta and Microsoft — this month announced a combined $112bn of capital expenditure in the third quarter.
Zhang previously told the FT that Airwallex was hoping to buy an American bank and apply for a UK banking licence. Many fintechs are attempting to buy nationally chartered banks in the US to accelerate growth in the country and lend across all 50 states.
