“In today’s economic climate, every business is navigating two competing interests: expanding operations and saving costs,” said Jack Zhang, Co-Founder and CEO of Airwallex.
The last few months, (nay, year), have posed increased challenges on growing businesses in fintech. The rising rate environment has put a strain on the financial system. Costs are increasing and, all the while, VCs continue their funding drought.
However, the desire to expand is still present.
“Global expansion is what we’re seeing as the key way they’re trying to grow,” said Ravi Adusumilli, GM of Americas & SVP of Partnerships at Airwallex. “They may want to slow down in a region where they already have existing customers, or they don’t see enough growth, or there’s macro economic reasons. Growing globally is where we’re seeing a need these customers have.
For those who are looking to expand their footprint, however, the environment has never been easy.
“Traditional banking solutions make it nearly impossible (to expand and reduce costs) as global expansion is often accompanied by burdensome complexity, slow time to market, and complicated regulatory requirements,” continued Zhang.
Expanding operations in the US alone requires endless paperwork across different states, all on top of standard regulatory compliance that can shift according to location.
“If you think about launching a financial services product, in one country, let alone in different countries and regions – its difficult,” said Adusumilli.
“In the US, for example, you have to go state by state to get money transfer licenses, or you work with a banking partner. That’s one country. When you expand globally, then you have to make sure you are adding the right regulatory framework, the right sanctions framework, and so on. For all of the regions you want to operate in.”
Airwallex has built its business model aboard this complexity. Providing a single platform for expansion, the company connects clients to their global network of over 50 banking partnerships. Providing capabilities in over 90 different regions, many institutions have chosen to partner with the company.
On Wednesday, July 19th 2023, Airwallex announced their partnership with Brex.
Brex storms through banking crisis to global expansion
Brex is one of the lucky ones to come out of the March banking crisis.
As Silicon Valley Bank started to fall, the company received an influx of deposits, soon becoming one of SVB clients’ key supports. Streamlining cash management, the company’s business accounts saw significant growth in the following months.
“Companies are seeking a new paradigm for their bill pay and cash management in the wake of this year’s banking crisis, and Brex business accounts check off all the boxes businesses are looking for,” said Henrique Dubugras, co-founder and co-CEO of Brex.
The company’s spend management platform, Empower, is also popular, with global companies such as Coinbase and Lemonade using the facility.
“Leading enterprises are expanding their footprints globally and are looking to Brex for employee spend and expense management across their operations,” said Dubugras.
Today, August 2, the company announced the launch of their Payables product, focused on Accounts Payable automation with AI, adding to their spend management capabilities.
Serving large, multinational customers, they seek to extend the same financial tools offered in the US, worldwide. The partnership with Airwallex feeds into this desire.
With the partnership, Brex is leveraging Airwallex’s suite of solutions, including local currency collections for its global corporate card as well as global employee expense reimbursements. In addition, it’s utilizing Airwallex’s network of more than 50 global licenses to accelerate its market expansion.
“They were looking for a single partner to help them scale wherever they want to go,” said Adusumilli. “They wanted to focus on the customers’ needs and the products that they are building, leaving the more complicated, compliance, regulatory, legal infrastructure to us. We bring that easily together with a set of APIs.”
Isabelle is a journalist for Fintech Nexus News and leads the Fintech Coffee Break podcast.
Isabelle's interest in fintech comes from a yearning to understand society's rapid digitalization and its potential, a topic she has often addressed during her academic pursuits and journalistic career.