Fintech Insider Podcast by 11:FS
00:17:33 · Jeremy Balkin
Although everyone keeps reminding me a mortgage, a wife, a house, a family, family in Australia. You must be absolutely certifiably mad to walk away from the comfort of JP Morgan to go and suffer as a startup founder. But so far it's been a good trade and I've got so many family and friends left behind at JP Morgan that our journey together is not over. In many ways, this is just the next chapter of it.
00:17:56 · Benjamin Ensor
[00:17:56] S0: Fabulous. Well, of luck. It's super, super exciting. Unfortunately, we're gonna need to move on to our next story, but really, really interesting and promising. Okay, so our next story is that Airwallex is continuing its Latin American expansion with the acquisition of Mexpargo. Airwallex has agreed to acquire Mexpargo, which is a payment service provider based in Mexico as it continues its expansion throughout Latin America. Mexpargo was founded in 2014 as a payments platform enabling merchants to accept a number of modern payment types via a single platform. The acquisition comes as Airwallex's market value tops 5,500,000,000 US dollars following an additional $100,000,000 of series E funding last year. Airwallex recently reported year on year growth of over 400% in The Americas as it increases its footprint in Latin America. And just a few days ago, Airwallex released another report highlighting the unmet needs of small and medium sized businesses to provide cross border payments throughout the region. According to, and I'm gonna get this name horribly wrong, Sopranay, you'll have to correct me in a moment. According to Ravi Adusumili, is the executive general manager of The Americas at Airwallex. He said, with the acquisition of Mexpago, we're on a path to become the number one payments and financial platform for modern businesses to go global. So Pranav, I'm gonna come to you both to correct my pronunciation, but also to tell us more about this story and the ambitions of Airwallex as a business.
00:19:26 · Pranav Sood
[00:19:26] S3: Well, I don't think I can correct your pronunciation. I think you did an absolutely knockout job and Ravi will be delighted that someone tried to even pronounce his surname, let alone succeeded. Look. The Mexpargo acquisition is is really exciting for us. We are at heart an infrastructure company, and our our product is an extremely global product, which allows our customers to be able to collect and pay out all around the world. And, you know, the last few years for us have been a journey of building out that coverage and and building out the reach that that we have as a business. Even this year, you know, we've expanded geographically. So in my region, we've we've expanded into Israel. We've expanded across Europe and and so on. And for us, as we look at, the the the kind of pathway to continue to grow, it's gonna be really important to keep on filling in those gaps that we see in in our coverage and in our infrastructure. So, Mexico, you know, why is it exciting? I think there are two reasons or maybe even three. One is Mexico itself is an incredibly exciting market. I'm sure, Ken, can see Kate nodding there. But Mexico is, you know, it's a 130 odd million people. It's The US's second biggest trading partner. It's, I think, in the top two or three global recipients of remittances, and it's got an incredibly young and and very, very well attuned population who are more and more used to buying things, you know, online, buying things from overseas. And it's a market that's ripe for some of the disruption and change that we've seen elsewhere in the world. So places like The Middle East, for example, where you've seen very similar structural changes. So Mexico itself, extremely interesting market. The second thing is when you think about some of the, you know, the demand that we're seeing from, our customers, our software customers, and and fintech customers around the world, they want to be able to get access to that market, you know, from outside. So they want to be able to send money and receive money and and and to be able to do that quickly and and efficiently. And and thirdly, you're seeing... It kind of alludes a little bit back to the conversation we were having earlier with Jeremy around the ecommerce world. You're seeing, I think, a trend towards reglobalization.
00:21:30 · Pranav Sood, Benjamin Ensor
So people moving supply chains and moving hubs away from some of the traditional places that they've been in Southeast Asia and to new places, you know, Mexico being being one of them. So for all those reasons, it was a very, very obvious place for us to want to to invest. And, of course, I should say this is still subject to regulatory approval, so there's still some work to to do until we can, to finalize this one. But this acquisition is is one for us that gives us a brilliant team, access to, you know, the licenses that that the Mexpago team have gone and got, and also access to the the the kind of clearinghouse that the system is SPEI, which is the the local payment rails in in in Mexico as well. So we're hoping that all of that together gives us a really nice springboard to continue to grow our infrastructure, and hopefully access to what I think is one of the world's most dynamic, and interesting markets. [00:22:20] S0: And a quick question just to build on that. What what does an acquisition get you that a partnership wouldn't? Because obviously you've got a number of partnerships around the world and so on. Are there things that you can do because you're acquiring or hopefully acquiring Max Pargo that you wouldn't be able to do if you had just, let's say, just partnered with them?
00:22:20 · Benjamin Ensor, Pranav Sood
[00:22:20] S0: And a quick question just to build on that. What what does an acquisition get you that a partnership wouldn't? Because obviously you've got a number of partnerships around the world and so on. Are there things that you can do because you're acquiring or hopefully acquiring Max Pargo that you wouldn't be able to do if you had just, let's say, just partnered with them? [00:22:36] S3: I think one is, of course, the speed. So it... It's a lot of... You know, we... We've gone and got, I don't know, 70, 80 licenses around the world ourselves, of all flavors, and getting a a license, keeping a license is a very difficult and time consuming thing. And so it's it's obviously helpful if somebody else has gone through that work already, and you can benefit from it. I think the second thing, which is also important to us, is being as close to the metal as you possibly can be. And and so, of course, you can partner with, fintechs around the world, but our preference is if we can find a way to go deeper and go closer to the core, we should do that. So it's speed and it's also depth that we think is really important. [00:23:14] S0: Kate, what do you think? Is this exciting news?
00:23:14 · Benjamin Ensor, Kate Moody
[00:23:14] S0: Kate, what do you think? Is this exciting news? [00:23:18] S2: Everything, I mean, yeah, sorry, I gave it away with my facial expression, but I find everything about Mexico exciting as Pranav rightly deduced. I mean, we've had so many guests on, you know, over the last twelve months and beyond who are doing their own thing In Mexico, just an absolute ton of interesting fintechs coming out of that market, serving, as Pranav said, like a really fascinating market opportunity, and as a hub within LATAM as a whole, which is seeing just a totally different population trajectory to what we're seeing in North America and Europe. So yeah, makes complete sense. And I suppose the outcome of that is Mexico isn't a market that's just getting started. Like it's a market where this innovation has been happening for a long time. So if you're just getting to the point where you are in a position to commit to Mexico and you are going to go in and start building from scratch, you know, as Panav said, like getting those licenses, building those relationships takes time. So actually, I can totally see why an acquisition makes sense. You need to get into this market now and you need to be able to use it to kind of drive yourself forwards, you know, in the next couple of months, not twelve months down the line. So I can totally see why an acquisition would make sense in a market which is accelerating at the rate that Mexico is.