Secretive Australian payments startup Airwallex knocked back a billion-dollar takeover bid from Silicon Valley payments giant Stripe in 2018 just months before it cemented its status as a technology ‘unicorn’.
The Age and The Sydney Morning Herald can reveal that Stripe approached Airwallex with a takeover offer in late-2018 worth $860 million for its investors plus an additional $200 million for the company’s founders, according to multiple sources close to the deal talks.
Senior management from both Airwallex, which helps small businesses send money to 130 countries in 23 currencies, and Stripe met in Shanghai that year and a small group of Airwallex employees later visited the company’s San Francisco headquarters to further discuss the potential acquisition, according to sources. A small team fom Stripe also visited Airwallex in Melbourne.
“They were doing payouts and wanted to invest in something very similar. Jack [Zhang, co-founder and CEO of Airwallex] got along with them very well. They liked his very aggressive style and made him an offer to buy it,” said one source. “He was definitely pondering the offer.”
Airwallex founders subsequently set up meetings with investors to gauge interest in the offer. However, staff were ultimately told that Airwallex’s founders had rejected the deal because they believed it materially undervalued the company. Stripe did not respond to requests for comment.
After the Stripe talks collapsed, Airwallex completed a $141 million funding round in March 2019, cementing its status as a technology ‘unicorn’ – a startup with private market valuation of more than $US1 billion. Investors in the round included Sequoia China, Chinese tech giant Tencent and Australia’s Square Peg Capital.
Airwallex remains the fastest Australian startup to achieve unicorn status. Its valuation has since trebled to $3.3 billion, with the company securing $US100 million in fresh funding from US-based fund Greenoaks, ANZ Bank’s venture arm ANZi and Atlassian co-founder Mike Cannon-Brookes’ personal fund Grok Ventures in March this year.
The offer also came with conditions – Stripe needed to conduct thorough due diligence, and multiple sources said the dealings never got as far as drafting a term sheet or opening Airwallex’s internal data and operations to scrutiny.