Airwallex announced the beginning of cooperation with the venture investment platform OurCrowd.
As part of the interaction of these companies, a project will be implemented, as a result of which a solution will be created that simplifies the process of investing in startups by institutions and individuals. The partners stated that their investment proposal would provide for the possibility of using multiple currencies and the absence of the need for so-called geographical linking.
The press release of Airwallex, a global payment platform, indicates that within the framework of existing financial solutions, the provision of funds for the development of startups involves the need to convert currency into US dollars and subsequent money transfer operations. The press release also notes that as a result of the partnership, OurCrowd investors from more than 195 countries will be able to finance the activities of firms at the initial stage of existence on a digital platform in local currency as soon as possible, on favorable terms and under a simplified procedure.
During the implementation of the cooperation project, OurCrowd integrates the Airwallex API. This solution is necessary in order for users to be able to invest in the national currency of their country of residence. In this case, investors will not be limited to bank transfers denominated in US dollars.
Pranav Sood, General manager of Airwallex in Europe, the Middle East, and Africa, says that as a result of such a mechanism as embedded financing, modern enterprises, regardless of their scale, can provide their customers with a global connection, which is formed on the basis of local payment solutions and minimizes possible problems with currency exchange. He also noted that optimizing payment transactions for investors and startups and solving the problem of currency costs simplifies cross-border business activities as much as possible.
This partnership was announced at a time when technology companies in the US at an early stage of development are facing the problem of reducing the amount of venture capital spending. In the second quarter of this year, American investors supported 3011 deals with startups, which is a third less than the same indicator a year ago. Venture capital companies spent less than $40 billion under these cooperation agreements, which is about half of last year’s volumes.
Some experts are not inclined to characterize the current state of affairs related to investing in startups as a crisis. In their opinion, the decline in the dynamics of financing is explained by an overabundance of support for firms at the initial stage of development during the coronavirus pandemic. They also believe that a slower pace of company creation is more profitable for the market.
At the same time, the founders of firms, investors and venture capitalists are concerned about the prospect that the current situation, if aggravated, will be a repeat of the dotcom crash in the early 2000s. Under the current circumstances, some startups have decided to join the ownership structure of larger firms. This has already become a kind of trend that has provoked something like a wave of acquisitions.
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