D1 Capital leads $138m round for China's Xtransfer

The company was established in 2017 by a team that previously worked across cross-border payments, risk controls, and business development at Ant Group.

XTransfer is an online platform that helps Chinese small- and medium-sized enterprises (SMEs) to set up offshore accounts and remit and receive money in major export destinations. It has approximately 150,000 clients. Transactions are routed through banks such as DBS, Citibank, and Standard Chartered, at wholesale rates, with XTransfer charging a 0.4-0.5% commission.

The new capital will go towards product and service upgrades, investments in big data and artificial intelligence, improvements in anti-money laundering (AML) risk management systems, and attracting global talent to support overseas expansion.

Headquartered in Shanghai, XTransfer has branch offices in Hong Kong, the UK, Canada, the US, Japan, Australia, and Singapore. The company's Series D round comes on the back of a sharp post-pandemic rebound in Chinese exports in the first eight months of 2021. Exports surged 24.5% year-on-year during this period, the fastest pace of growth in the past decade.

SMEs often struggle to access banking services, given tightening AML rules globally and their participation in transactions that are high-frequency but relatively small in size, which makes them unappealing to mainstream lenders. XTransfer's automated platform addresses AML and other compliance requirements, while opening collection accounts swiftly and offering low-cost foreign exchange services.

Guobiao Deng, the company's founder and CEO told AVCJ in March 2020 that COVID-19 has helped the platform recruit new users. “Trust is the ultimate threshold that we have to break. After being forced to use us, they have experienced the convenience and better service quality, so we are confident we will keep them,” he said.

In March 2020 alone, XTransfer recorded a transaction volume three times that of its peak month in 2019. The company opened a new office and increased headcount by 50% to handle the steady flow of new customers.

XTransfer raised $15 million in Series B funding in 2019 led by Electronic World Trade Platform (eWTP) Ecosystem Fund, an Alibaba Group and Ant Group-backed vehicle that focuses on innovation and international expansion. This was followed by two-tranche Series C. Telstra Ventures led the first in October 2020 and Lavender Hill led the second the following January. The size of the round was not disclosed.

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• Topics
• Greater China
• Financials
• Technology
• Expansion
• China
• Fintech
• Growth capital
• D1 Capital Partners