Airwallex strengthens its presence in Latin America with the acquisition of MexPago

Airwallex, a leading global financial company, has agreed to acquire MexPago, a firm based in Mexico. This move is a clear intention of Airwallex to establish a strong presence in the burgeoning Latin American market. Although only a few specific details of this agreement have been shared, regulatory authorities are expected to greenlight the transaction soon.

The fintech industry has shown a growing interest in Latin America, driven by its predominantly young population and increased online transactions with rivals like PayPal, Stripe, and Block. Airwallex benefits by charging fees for each transaction made. Airwallex’s CEO, Jack Zhang, mentioned that Mexico is a strategic point, especially given the current geopolitical and economic uncertainty between the United States and China.

What is Airwallex?

Originating in Australia, Airwallex has become a global powerhouse in the financial sector. Its operations span several international markets, such as the United States, Canada, China, the United Kingdom, Australia, and Singapore. Valued at USD $5.6 billion, it is Australia’s second most treasured unicorn, surpassed only by Canva, a software design startup valued at USD $40 billion.

Among its client portfolio, Airwallex boasts renowned companies such as Papaya Global, Zip, Shein, and Navan, processing transactions exceeding USD $50 billion annually. Its strategic partnerships with giants like American Express, Shopify, and Brex underline its commitment to international growth.

In the current financial landscape, where fintech companies face challenges due to rising interest rates and difficulty in attracting investment, Airwallex has positioned itself firmly. It has raised over USD $900 million in venture capital, with notable investors such as Salesforce Ventures, Sequoia, Tencent, and Lone Pine Capital.

Despite these achievements, Zhang pointed out that Airwallex must still be ready for an Initial Public Offering (IPO). While the company processes more than USD $50 billion in transactions annually, it aims to reach a target of USD $100 million in annual recurring revenues before considering an IPO.

Mexico: A Strategic Choice

Zhang highlighted the choice of Mexico as a critical destination for Airwallex’s expansion due to the country’s regulatory facilities. With the acquisition of MexPago, the company can access the Electronic Payment Funds Institution (IFPE) license. This license allows Airwallex customers in Mexico and worldwide to benefit from local payment methods, such as SPEI and OXXO.

The swift acquisition of the regulatory license in Mexico, avoiding extensive procedures with the Bank of Mexico, was a determining factor in this decision. “Having access to the license for native infrastructure gives us an unparalleled advantage with our global proposition,” Zhang expressed in an interview with CNBC.