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The $5.6bn Singaporean payments start-up Airwallex has laid out plans to seek banking licences in the UK and US in a bid to expand into lending and compete with global banks.
Chief executive Jack Zhang told the Financial Times that the corporate payments company — which secured its latest valuation in a 2022 funding round — was set to apply for a UK banking licence and would later seek to obtain a US one by buying a bank.
“We are planning to apply for a UK banking licence, the UK is one of the most friendly markets for fintechs . . the [Financial Conduct Authority] is still one of the best regulators” said Zhang.
Zhang said becoming regulated as a bank was “a lot more complicated” in the US given the plethora of regulators and state licences. As a result, the company would probably seek to gain regulatory approval by buying a US bank later down the line, he said.
Airwallex was founded in Melbourne in 2015, but has moved headquarters to Singapore. The company provides banking and multicurrency payment services for global businesses including car racing group McLaren.
However, its growth has largely relied on payment licences so far, preventing it from offering credit at scale. It is now seeking to expand into lending and is trialling a credit card in Australia.
“Any product that a global bank has, we will have,” said Zhang. “Ultimately in a decade I think we’re going to displace some of the global banks.”
Airwallex’s last funding round was led by Lone Pine Capital, and its investors include Tencent and HongShan, the former China arm of US venture fund Sequoia.
The company offers services to global businesses including staff payroll and payments to suppliers in multiple currencies. Airwallex entered France and Benelux last year and plans to launch in Ireland and Germany next.
However, despite the push to be regulated in the UK, Zhang has ruled out an IPO in Britain, saying the company is set on a US listing.
“The US market is still the most liquid capital market and most accessible capital markets in the world,” said Zhang.
The chief executive and former engineer at Aviva and the Australian National Bank said London remained far behind the US in terms of access to capital despite efforts to boost its attractiveness.
“If you are the size of [buy now, pay later provider] Klarna [the US] is kind of the only option out there. I don’t think the [London Stock Exchange] has done anything to differentiate [themselves].”
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