Airwallex Plots Silicon Valley Expansion

Payments group opens San Francisco base and trims Tencent stake as it courts US investors

Airwallex has set out plans to deepen its presence in the United States after raising $330mn in a funding round that values the payments group at $8bn, as it seeks to reposition itself as a Silicon Valley-centred fintech ahead of a potential public listing.

The company has established San Francisco as its second headquarters and said the latest capital injection would be used to accelerate hiring in the US, particularly in artificial intelligence and software engineering. Airwallex plans to double its American workforce to more than 400 people over the next year as it builds products aimed at multinational businesses operating across borders.

The fundraising also marks a deliberate shift in the company’s shareholder base. Tencent, which backed Airwallex at seed stage in 2016, has sold down part of its holding to make room for US investors including T Rowe Price and Robinhood Ventures. Airwallex chief executive Jack Zhang said Tencent’s stake had been reduced to “significantly less than 10 per cent”, and confirmed that a Tencent-appointed director had recently stepped down from the board.

The changes come as Airwallex attempts to counter growing scrutiny over its links to China, at a time when geopolitical tensions and concerns over data security have become increasingly sensitive for fintechs operating in the US.

Responding to political and investor pressure

Last week, the company was publicly criticised by Keith Rabois, a prominent Silicon Valley investor and former executive at PayPal and LinkedIn, who accused Airwallex of acting as a “Chinese backdoor” and suggested that customer data could be accessible to Chinese authorities.

Airwallex rejected the claims, saying they were false and misleading. The company said it does not store US customers’ personal data in China, including Hong Kong, and that strict internal controls prevent such data from being accessed by staff based in those jurisdictions, in line with US legal requirements.

Zhang said the latest funding round should be seen as a vote of confidence from established American investors. He described it as “external validation from some of the most reputable US institutions” as the company prepares for a possible initial public offering within the next three to four years.

The dilution of Tencent’s stake appears designed to reassure regulators, enterprise clients, and potential public market investors, particularly as Airwallex pushes deeper into the US financial system.

A global business with Asian roots

Founded in Melbourne in 2015, Airwallex moved its headquarters to Singapore as it expanded across Asia and beyond. The company has built a sizeable presence in mainland China and Hong Kong, employing hundreds of staff in the region. It provides multicurrency accounts, cross-border payments, and embedded financial services to businesses, including high-profile customers such as Formula One racing group McLaren.

Its growth has been fuelled by demand from companies seeking alternatives to traditional banks for international payments and treasury management, particularly in markets where currency conversion costs and settlement delays remain high.

The company’s previous fundraising round in May valued the business at $6.2bn, meaning the latest deal represents a sharp uplift in valuation despite a tougher funding environment for private technology firms.

Betting heavily on artificial intelligence

Zhang said the decision to establish a San Francisco headquarters was driven primarily by access to talent and innovation rather than symbolism. “From our point of view there are two outcomes in the next five to ten years,” he said. “Either you become an AI-native company or you become irrelevant. I don’t think there’s a third outcome.”

He added that the majority of meaningful advances in artificial intelligence were still emerging from Silicon Valley, making a physical presence essential if Airwallex is to compete with larger rivals.

The company plans to hire large numbers of AI engineers to improve fraud detection, payments routing, compliance automation, and customer onboarding, areas where speed and accuracy can offer a competitive edge. Airwallex believes smarter use of data and automation will allow it to scale globally without the cost base typically associated with regulated financial services.

Facing formidable competition

Despite its ambitions, Airwallex is expanding at a time when the technology landscape is being reshaped by unprecedented levels of investment from the world’s largest companies. Alphabet, Amazon, Meta, and Microsoft alone have announced combined capital expenditure of $112bn for the third quarter, much of it directed towards AI infrastructure and model development.

While Airwallex does not compete directly with those firms, the scale of spending underlines how crowded and capital-intensive the race to deploy AI-driven products has become. Smaller fintechs must therefore be selective about where they invest and how they differentiate themselves.

For Airwallex, the focus remains on applying AI to payments and financial operations rather than developing foundational models. That narrower approach may allow it to innovate without matching the spending of the largest technology groups.

Regulatory ambitions in the US and UK

Zhang has previously said the company is exploring the acquisition of a nationally chartered US bank, a route increasingly favoured by fintechs seeking to expand lending and deposit-taking across all 50 states without navigating a patchwork of licences.

Airwallex is also considering applying for a UK banking licence, a move that would deepen its presence in one of Europe’s largest financial centres and allow it to offer a broader range of services to corporate clients.

Such steps would significantly increase regulatory oversight and capital requirements, but they could also make the business more attractive to public market investors by embedding it more firmly within established financial systems.

Preparing the ground for an IPO

The reshaping of Airwallex’s shareholder base, its US expansion, and its emphasis on governance and data controls all point towards preparation for life as a listed company. Reducing exposure to Chinese ownership, particularly in the current political climate, is likely to be viewed favourably by American regulators and institutional investors.

At the same time, maintaining operations in China and Hong Kong remains commercially important, given the scale of cross-border trade and payments flowing through the region. Balancing those interests will be a central challenge as the company grows.

For now, Airwallex appears confident that it can manage that tension. By anchoring its leadership and product development more firmly in Silicon Valley, while continuing to serve clients across Asia and Europe, it hopes to present itself as a global fintech rather than a regional one.

Whether that strategy will be enough to sustain its $8bn valuation, and to convince public market investors in an eventual IPO, will depend on its ability to grow revenues, navigate regulation, and deliver on its promise to become an AI-led payments platform rather than just another cross-border processor.