Airwallex CEO & Co-Founder, Jack Zhang: The Angel That Turned $1M into $1BN

I don't know what financial discipline is, so I don't have a budget. I'm just like, “Hire as fast as possible. Blow it all up.” Then I realized at one point that we were running out of money. Every month, I was basically raising money.

So we went from zero to a billion-dollar transaction volume within about 9 months. We basically never grew below 100% from 2015 to 2023. We went to around $500 million in ARR in August last year, then hit about $600 million in November and $700 million in January.

Jack, dude, I'm so excited for this. We walked around the park, and I heard your story. Respectfully, I was like, “This is such an incredible story that I don't think many people know quite how awesome it is.” First, thank you so much for joining me.

Thanks, Harry. It's a great pleasure to join the show.

Dude, I want to start with—normally, I don't love the whole “take me back to your childhood” thing, because it's normally about going back to the early days of Stanford. But you started in Australia, and I want to start when you were very young. Did you start by working in a petrol station? Can you take me back to your first job and that early time?

I came to Australia when I was, I guess, 15. I started high school, and my family basically lost most of its money. I lost financial support when I was 16, and I had to figure out how to survive in a foreign country by myself.

That's why I started working in a restaurant and in a lemon factory.

You worked in a lemon factory?

Yeah, that was during the summer. I would take a few hours of trains and buses to get up into the mountains every day, literally carrying lemon boxes—thousands of lemon boxes a day—in 40-degree heat for 12 hours a day without even eating lunch.

How much did they pay you at the lemon farm?

They actually paid okay. They paid about 14 Australian dollars an hour. Because you could work more than the 20-hour limit during the holidays, it was actually a pretty decent income. It was just a really, really tough job.

Were you nervous or scared? You were 16 or 17 at this point, on your own in a foreign country without financial security. That's a pretty intimidating place to be.

I guess it was just a situation where you don't have a choice. I left China, where I was born, and came to Australia. I had already been in Australia for over a year, so I couldn't go back to China to take the exam for university because I wouldn't have been competitive anymore. I didn't even know how to return to the education system by that time.

You literally have to figure out how to survive and how to pay for tuition, which is very expensive for international students. I remember it was $24,000 a year, and you have to figure out the living expenses and help fund your studies. I had to do my part and work as many jobs as possible to figure out how to live on my own.

That's nuts. I love that. There’s going to be a great visual that my team will make of a lemon farm. You’re earning 14 Australian dollars an hour in a lemon factory and working in restaurants. What’s the next step? You go to university? Take me to that time.

I went to university in Melbourne. That's where I met my 3 co-founders. I also worked different jobs throughout college. I worked in a restaurant as a dishwasher, and I worked in a bar at the Westin Hotel as a bartender.

I basically worked from 4:00 to 11:30 in a bar. Once that was finished, I started working at a petrol station from midnight to 8:00 a.m. I literally worked 16 hours straight, 4 or 5 days a week.

What were you doing at the petrol station?

I was doing the overnight shift, sitting there, cashing people out when they paid for petrol, and selling lollies.

Selling lollies—that is the most random thing to sell at a petrol station. You go to a petrol station and say, “Do you want to pay 5 bucks for 3 chocolates?” That was you.

Do you know what? I don't actually drive. I don't know if you noticed, but I haven't passed my test. It's one of my many flaws. A petrol station isn't something I know too well, but I would go for a lolly.

So, we're at the University of Melbourne at this time, and we've met 3 co-founders. Is that correct?

Correct. I met 1 of the 3 co-founders when I got into the University of Melbourne in my first year. We were in the same faculty, and we all started computer science. My CTO, Jacob, was 1 year older than me but 100 times smarter.

You meet him at university and become friends. Do you start tinkering with ideas together while you're studying computer science?

Well, they spent most of their time playing Dota and competing against each other. I was pretty bad at playing Dota, to be fair. I spent most of my time working and very little time at university. I just tried to spend as much time as I could there.

I wasn't the best student in my college. Compared to high school, where I was one of the top students in the school, at university I was just an average student because I didn't spend enough time studying.

Dude, you're working 16 hours a day. I mean, poor you. University is like the side gig.

What was the first thing that you started? If I say to you, “What was your first entrepreneurial thing?” what was it?

I probably wouldn't call it entrepreneurship, but it was my first taste of what success looks like. I started a magazine called Urban Exploration when I was back in high school, when I was 13 or 14, together with students in the student society.

Everyone was obviously working for free, and we needed to raise money for student funding. I had to figure out how to do that. We were essentially going to restaurants, computer shops, and other businesses around the school to raise money. They would say, “Why don't you just put a flyer up for us for $2 per person and we'll give you some money?”

Nobody wanted to take flyers. Who cares? So we thought we might as well write something more interesting and put those ads for the restaurants into a magazine or booklet we created, and hopefully people would be interested in taking it.

Right.

Because we wrote quite interesting stories—student love stories, how to play Counter-Strike—and because we were at one of the best schools and wrote really interesting stories, the magazine went viral.

We printed it through the school for free, so we didn't have any costs. We had a limited print run, and everyone wanted a copy of it. Over about a year and a half, we got around 8,000 merchants putting ads on the magazine, and we actually made a decent amount of money.

We eventually donated it to the school, but it was a massive early success in my life, I would say, before I grew up and came to Australia.

Do you think people are born entrepreneurs, or do you think you can become one? When you think back to yourself as a 13- or 14-year-old, what do you think?

I think when you grow up and taste what success looks like early—whether through sport, any type of competition, Olympic competition, or any sort of team sport—you gain tough experience.

When I lost financial support and my family lost most of its money, that really toughened me up. You become quite resilient. When you're working 100 hours a week at that age and have to go through the mental challenge of figuring your life out at such a young age, I think you just become a lot more resilient.

People say, “I get burned out. I'm working too hard,” and so on. I'm like, “What are you talking about? Do you know what a tough life looks like?”

Especially in Australia, it's a very wealthy country in general. Fewer people have experienced tough things in life, and generally people have a different perspective on what life is.

It's funny for me. I worked 7 days a week, and after 3 years people said, “You won't be able to keep this up.” After 5 years, they said, “You've done 5, but you won't be able to keep this up.” Now I've done 100 hours a week for about 20 years.

Dude, you still look about 25.

I look a bit old now.

The amazing thing is that you did that on things you didn't love. I've done 100 hours a week for 10 years, but mine was in cushy offices with lovely things around me. You did difficult jobs in the early years, working insane hours. That's also what's so insane—lemon factories and restaurants.

I didn't enjoy those jobs. When I was working in the lemon factory, in the 40-degree sun and carrying these boxes, or washing dishes, I was thinking, “One day, I don't want to do this anymore. I want to do a proper job, and I want to write code.”

The show has been very successful, I think, partly because I'm very open about my life. I saw my grandparents lose everything, including their home, overnight.

You lose all security as a family, and it's very jarring. I'm always running from that. The reason I work so ferociously hard is because I don't want my family to ever be in that place. That's why I'm working so hard, if I'm honest.

Are you running from that financial insecurity still, or do you think you're running towards something?

I think you have different phases in life, right? That's kind of why I started Airwallex. After I graduated, I went to work at Aviva. I worked at a bunch of investment banks as a developer and algorithmic trader. When I was doing those jobs, I really enjoyed writing code, but that wasn't enough to give me financial security. So I was doing a lot of stuff on the side.

I had import-export businesses, exporting olive oil and wine from Australia to China and other countries. I was importing textiles from China to Australia, and I had a real-estate development business. I had a business in architecture and project management.

I had all these side businesses that, to be frank, generated millions of dollars in income every year, passively. Obviously, I worked full-time. I worked pretty hard at my job, and I worked another 6, 7, 8 hours and all the weekends for my side hustles. I made $200,000 a year on my full-time job, more or less, and I made $2 million, $3 million, $4 million, or $5 million a year on the other side hustles as those businesses got more mature.

So you had an import-export business? Tell me about it.

Yeah, I was basically exporting olive oil and wine from Australia to China and other countries, and importing textiles from China to Australia. At one stage, I was a reseller of phone cases. I found an Australian brand creator called Quallok [?]. It's now private-equity-owned, and the business has actually gone pretty big. I worked with those guys, who were designers, and helped them sell phone cases. I was making a decent amount of money.

I had a lot of these side businesses that were making money. Coming back to the financial insecurity, I probably made more than $10 million when I was 28 or 29, and I had financial security at that time. My real-estate business was getting to a real scale. We were starting to build 40 or 50 apartments—a $40 million–$50 million Australian-dollar project.

I wasn't full-time involved in anything, but that was kind of the direction.

Dude, how the fuck did you do that? $2 million, $3 million, $4 million—I mean, that's real money when you're working full-time at Aviva or as an algo trader and then you're doing an import-export business of olive oil. That's not an easy business to do, is it?

It's actually pretty easy. Think about it: You literally just find a supplier and find a buyer. You're not a producer, and you don't need to do any marketing. It's just B2B, right? All you need to do is find buyers and sellers.

At one stage, I was a reseller of phone cases. I found an Australian brand creator called Quallok [?]. It's now private-equity-owned, and the business has actually gone pretty big. I worked with those guys, who were designers, and helped them sell phone cases. I was making a decent amount of money.

I had a lot of these side businesses that were making money. Coming back to the financial insecurity, I probably made more than $10 million when I was 28 or 29, and I had financial security at that time. My real-estate business was getting to a real scale. We were starting to build 40 or 50 apartments—a $40 million–$50 million Australian-dollar project. I wasn't full-time involved in anything, but that was kind of the direction.

You just got people to run them for you?

Yeah. One of the guys running that for me was my co-founder, Max Li. He's the head of product design. He became an architect and then started the real-estate business with me, started a coffee shop with me, and we found the foreign-exchange and international-payments issue that led us to founding Airwallex.

At that time, Max and I had financial security. We were basically just in a coffee shop thinking, We cannot do this just to make money for the rest of our lives, right? We wanted to create a real-scale business leveraging technology.

I went to college when I saw Facebook take off, right? I don't know if you know, but we didn't use Facebook when we were in college. We were on MySpace, Hi5, and Friendster. Facebook was not a thing, and we just saw that shoot off. Google wasn't even a massive company back then. We saw the whole internet take off, and we also saw the internet in China take off, especially after the early 2000s. Tencent, WeChat, Alipay, and Alibaba all took off. You just lived in this time when a lot of generational companies got created, right?

Dude, the lovely thing for me is that I knew parts of this story, but I didn't know a lot of this story. Before we go to the founding of Airwallex, you had all of these side businesses. How do you think about the importance of focus? When I hear people with lots of side businesses, I'm always like, Why didn't you just focus on the real-estate company? You could have made that 10 times bigger. How do you think about the importance of focus versus when it's worth it to have a portfolio?

Because I need to really enjoy and be passionate about what I do. I'm not passionate about or interested in any of these businesses I started. I always say that they're businesses that make money. Obviously, I want financial security, but making money isn't going to make you happy.

I wanted to leverage my engineering skill set to create a real, amplified impact at scale. I started probably 10-plus businesses, and what I really concluded is that I didn't like any of them. I still wanted to pursue what would make me excited and passionate, and that's what led to the whole founding story of Airwallex.

Well, I want to go to that. I feel sorry for many people today because I think so many people don't find what they truly love. I'm so lucky, honestly, Jack. I found venture when I was 13 years old by watching The Social Network. That's how I got exposed to venture, and I'm very lucky that I found it.

It took me a decade, right? If you count the early days, I started more than a decade ago. You started washing dishes, working at a petrol station, and working in a lemon factory. Then you went from there to import-exporting. You went from trading, architecture, real estate, and a coffee shop. All of that kind of led to a bigger idea that you feel passionate about. So take me to the moment where you found that passion, where you thought, You know what? I've tried these 10 businesses, but this is the thing I want to do.

I always knew I loved technology. That's why I kept my coding job. Even though I was making 10 times the money on the side, I never resigned and never thought about resigning, because I needed to write code every day. I felt that one day, when I actually wanted to start a business, I could still create something.

When we were running the coffee business, the idea wasn't really to run a coffee business. The initial idea was that, in Australia, there's a big telco called Telstra, and they publish the Fast 50 fastest-growing companies every year in Australia. More than half of those companies are retail businesses, like burger chains, coffee chains, or some sort of retail chain.

I started a burger chain and a coffee chain. When I say chain, it was really only 1 business at a time, and it was supposed to become a chain. During that setup process, the first problem we found was that there was no Square equivalent around 2013.

The whole point-of-sale and payments system, order management in the back of the kitchen, ordering system, and delivery system—nothing was really set up. I thought, I should start basically a Square, plus the whole backend order-management system and payment system. I pitched the idea to my CTO, Jacob. I was like, Dude, let's do something together. I think this is a real opportunity.

At that time, NFC, or touch payments, started changing consumer payment behavior. I thought, Let's build something that can support NFC payments, and let's build this point-of-sale and payment system for offline merchants. He was like, Oh no, I think QR is going to take over the world. At the time, he had started an AI company in China, and he had started the AI business 10 years too early. He didn't believe in this whole NFC thing.

He was like, QR is going to take over the world, and we should build a QR thing. I was like, Nobody uses QR. I've never heard of this thing. This is a very China thing, and I don't think so. We ended up agreeing to disagree on that idea, and then we let it go. That could have been another billion-dollar startup in 2013.

We kept building the coffee business, and halfway through, we launched it. We were importing beans from Brazil and Indonesia and importing packaging from China. Payment was a real issue. My co-founder's name is Max Li, and the same name is on the OFAC blacklist. Whenever he sent a payment using his personal name—at that time, we were still using personal names to send money around the world—his payment got blocked somewhere in the middle because it was going through the SWIFT network and bounced back after 2 months.

He kept complaining to me, Why does it take 2 months for the payment to come back? I looked under the hood and thought, What is this SWIFT thing that was built in the 1970s? How does SWIFT work?

If you're sending money from NatWest to a bank in Brazil, say, a small bank in Brazil, they won't have a bilateral relationship. They go through the SWIFT network. There are lots of intermediaries—the large global banks that dominate those relationships.

Essentially, NatWest will go to Barclays, Barclays will go to Citi, Citi will go to Itaú, and then it will go to this smaller bank in Brazil. The smaller the country, the more counterparties in the middle are involved. They charge a higher fee and slow down the process, and there's a more complicated compliance process because SWIFT messages only contain 140 characters.

You can’t really put a lot of information in there to reduce false positives, and I was just like, “This doesn’t make any sense. Why has this thing existed for 50 years and processed trillions of dollars every day? Why can’t we fundamentally build a new system to help people move money just like they move information, like data? If the data on the internet is real time, why isn’t money? Essentially, it’s data; it’s a ledger.”

I get you, Jack, but what happens then? As you said, SWIFT was created in the 1970s and is one of the most concrete architectures, which we don’t really question. We still send SWIFT payments today, obviously. It’s still dominating the payments world today. What happens then? You’re like, “Hey, this is broken. We should have another way.” What do you do next?

I basically looked into this. Initially, I thought, “Let’s just do point-to-point.” If people want to send money from Australia to Brazil, and people from Brazil want to send money to Australia, you can just net it off. That was the initial idea we raised our seed round on.

But when we actually built the algorithm, we realized the amount of volume we needed to make that work was billions and billions. We were never going to make it work. I didn’t even know how to get $100 million in volume, let alone billions.

So you have the idea: “I want to reinvent the SWIFT network. I want to change payments.” At that point, before you build a product, you go and raise money?

This is another funny story. When I was doing the coffee business and thinking about starting Airwallex, one day I finished work on a Friday and went to the coffee shop to catch up with Max, another co-founder of Airwallex. I said, “I’m going to resign. Let’s just do this seriously.”

I met a girl who was a friend of Max’s, Lucy, who had just resigned from investment banking and wanted to get married and have a family in Australia. I hit it off with her, and she was curious about the coffee business. She said, “I want to talk to you more about the coffee business. Maybe I can invest in this coffee business.”

We said, “Let’s grab dinner.” We grabbed dinner, and after talking about the coffee business, I said, “Actually, you know what? I’m going to stop investing in this coffee business. I’m going to start a new business that’s going to revolutionize cross-border payments and fundamentally change how money moves around the world.”

She said, “Tell me more about it.” I told her that I had a background in foreign exchange, that I was an engineer, and that my co-founder was a genius engineer. I made my pitch, and she asked, “How much money are you raising?” I said, “I’m probably going to raise $1 million in U.S. dollars.”

She said, “What if I give you $2 million?” This was a girl I had met for the first time in my life. We had talked for less than an hour, and she was offering me $2 million. I asked, “For how much of the company?” She said, “I’ll give you $2 million for 40% of the company.”

My initial reaction was, “Should I take this seriously?” Then she said, “Let’s have a deeper conversation at law school tomorrow.” She had also gone to the University of Melbourne, so all 4 of us went to the same college. She said, “Let’s meet at 8:00 tomorrow and go deep on this.” I felt that she was serious.

We went to the law school on Saturday. This was the second day I had met her, and she negotiated with me for 3 hours. By 11:00, we agreed that she would invest $1 million at a $5 million post-money valuation for 20% of the company.

Her husband was there and was strongly against it. He said, “We’re going to use this money to buy houses and have a family. What are you doing?” She said, “I’m keen, and I actually wanted to join these guys.” She pushed it through, and we verbally agreed that we were going to do the deal.

The crazy thing is that this was before I had even resigned from my full-time job at ANZ. It was also before I even had a company registered. By Monday, I got a text message from my bank, CBA, saying, “You’ve got $1 million U.S. dollars wired to your personal bank account.”

Obviously, I had given her my bank account details, but I didn’t expect her to wire the money without anything being signed.

Wow. Then you put the paperwork in place?

Yes, and that took months.

So you got the money 3 days after meeting her for the first time, and that ended up being one of the best investments anyone has ever made.

This was a girl who was 24 or 25 years old and had never made an investment before. It was her first investment. At a $9 billion valuation, if you assume reasonable dilution, she turned that $1 million into $1 billion.

It’s crazy.

I’m going to give her some advice if she’s listening: stop investing. You will never make such a good investment again. You’ve reached the high.

That is insane.

I think she made a few other investments that didn’t turn out to be good afterward, and I think she stopped investing.

That is insane. Okay, so you get $1 million wired to your personal account, which nowadays would be a challenging compliance problem, by the way. You have $1 million wired to your account, and you get to work. What happens then?

I resigned. I literally got the money and resigned the same day.

I love this. You resign, you go to Max, and you’re like, “Right, let’s do this. Let’s get to work on Airwallex.”

There was a fifth co-founder, Ki Lock, whom I used to work with. I basically forced him to resign because he had 3 kids and a lot of obligations, but he was one of the best engineers I knew.

We worked together at Australia and New Zealand Banking Group. So Max, Lucy, and I went downstairs in the ANZ building and said, “We’re not going to leave until you resign. Go resign.”

He was stuck there for 2 hours talking to his manager, who was also my previous manager. I knew they were going to try to retain him because he was one of the best engineers they had ever had. I said, “Dude, we’re not going to leave until you resign, whatever time that takes. Go resign.” He had to deal with his wife later. We literally forced him to resign.

I mean, that is nuts. Were you nervous at all about leaving the safety net and going all in on Airwallex? Was there ever a part of you that thought, “This is real. I’m leaving security”?

I also went all in in the early days. We lived in a 10-square-meter office, slept in sleeping bags, and worked there 20 hours a day.

You slept in a sleeping bag?

Yes. Max, Jacob, and I literally lived in the office. Obviously, it was a little difficult for Lucy to fit in, but there were actually 4 of us, and we would literally live in the office.

Okay, so you’ve got $1 million, the 4 of you, and now you’re just building product at this stage?

Correct. We were also raising money because I didn’t think the $1 million was enough.

The $1 million wasn’t going to get you very far.

We raised another $2 million from a VC in Hong Kong.

Got it.

All the VCs rejected me in Australia. There were only 3 VCs, which is funny. I went out pitching the idea of building a new foreign exchange and money-movement network, and a lot of people thought I was crazy.

One of the VCs actually believed in it and wanted to write a check and lead the round. One of the founders of the VC, Matrix Partners, gave us a term sheet. They signed it, and then they took it back.

I had a call with the founder after they signed the term sheet, and they said, “I don’t think this algorithm thing is going to work, and that’s not defensible anyway.” So they basically took it back.

What deal did they have on the table?

It was $10 million post-money: $2 million at an $8 million pre-money valuation. I had literally rejected all the other VCs by that time. The only one I hadn’t rejected was Gobi Partners from Hong Kong, and they ended up putting in $1 million, along with other smaller VCs that put the $2 million together.

My God. That is a billion-dollar pullback.

Yes. They should have closed the deal after they signed the term sheet.

They signed the term sheet. Wow. They signed the term sheet.

Yeah. They signed. Wow. That’s appalling. That’s bad. Okay, so this is one of the most famous VCs in Asia.

Yeah. The other Australian VC said no. They didn’t even want to meet me.

They didn’t want to meet you?

No. I didn’t even get a meeting. I just got an email. It’s funny: both VCs that rejected me are now on Airwallex’s cap table.

No way.

Yes. They invested at a $6.2 billion valuation.

AirTree, Square Peg, and Blackbird?

No. Square Peg invested in Series A+. Essentially, that saved us from dying. There were 3 times when we almost died, and that was the second time we almost ran out of money. Square Peg invested, but Blackbird and AirTree were 2 of the largest VCs in Australia, together with Square Peg—the 3 biggest VCs.

Blackbird and AirTree rejected us multiple times, and then they joined the round. They wrote the largest check at a $6.2 billion valuation ever in our history.

Whoa.

Fun fact: John Henderson, who’s at AirTree, was the first person to ever believe in me. He introduced me to one of my business partners, and he introduced me to my best friends. John, I don’t think you were probably at AirTree at that point, but I think he was.

Well, then you fucked up.

No, but I think we had a great conversation. I love John, and for whatever reason, he didn’t invest. I don’t get it. I’m just going to be totally honest. You very kindly invested in Project Europe. It’s so obvious that—

But dude, I have a VC on the side now, right? I have a VC called Capital 49, and I wouldn’t invest in myself. I think that’s crap.

Then you’re a bad investor, because if I had spent any time with you, I would have asked you about growing up, your first jobs in a lemon factory, and being a restaurant waiter. Nobody ever asked me.

That’s what’s ridiculous. Why did no one ever ask you?

Because if I heard that, you know who asked that?

Who?

Seriously, Yuri Milner from DST Global asked me. That’s why Yuri is Yuri.

But dude, your product doesn’t matter. That’s crazy.

That’s another crazy story. Basically, the first time I met Yuri, we talked—I talked to the partner about the business, obviously, because it was Series C, and it was straight after I rejected the Stripe acquisition offer. Yuri basically didn’t ask me anything about my business. He just asked me a bunch of stuff about how I grew up.

After that, they were like, “We’re going to invest at a $1.1 billion valuation—$100 million.” Literally, within 2 hours, we agreed to the terms. It’s crazy.

This is what I find astonishing: I really don’t care what your business is. No offense, but you’re the person who’s going to drive it. You will be for the next 20 years. I can tell whether I’m going to invest in you from hearing about how you think about working in the lemon factory and being on your own in Australia at 16 with no financial security.

There are so few people who can go through those hard times and get through them.

Yeah.

You wouldn’t volunteer to pitch your story before people ask you. You know what I mean?

I get you totally.

No, you have to be, but that’s where the onus is on the question-asker. I don’t think there’s ever such a thing as you doing a bad interview. No one ever gives me a bad interview; I give them a bad interview, which is me not asking the right questions. Same for a VC.

Well, you’re asking the wrong question now, maybe.

But you mentioned Yuri there. Yuri is an astonishing man himself. How was that meeting?

At that time, I think Sequoia, Tencent, and Mastercard led my Series A. For Series C, because we had just rejected an acquisition offer from Stripe for close to $1.2 billion, we got a term sheet from Hugh House[?] from Goldman, who wanted to lead a $1 billion round. The terms were not the best.

Neil Shen from Sequoia China at the time basically didn’t want me to take the deal, because he was the one who recommended that I not take the Stripe deal. He still said, “You should just make the right decision for yourself and for the company.”

Neil Shen introduced me to 2 companies. He introduced me to John Lindfors from DST, and he introduced me to Scott Shleifer from Tiger. I had a chat with both, and DST ended up leading the round.

How was the meeting with Yuri? Was it a cool meeting? You mentioned him asking—

I mean, it’s a weird meeting. Imagine you’re Series C, you’ve raised above $1 billion, and all you really care about is how someone grew up. It’s kind of weird, right? And they give you a verbal term sheet on the spot. It’s also kind of weird.

Again, I don’t know if it is. When you think about a billion dollars, I’ve never— The true generational, defining companies are founder-led. We have Baillie Gifford on the show, and of their top 10 positions, 9 of the best companies in terms of performance are founder-led. If that’s the case, 90% of the best performers are founder-led.

We’re only here, Jack. The other thing that we both know now as investors is that a billion dollars doesn’t cut it. $10 billion is what we need for this venture model to work. If that’s the case and they’re founder-led, I don’t care about your pricing this quarter or your growth this quarter. I care about you.

Okay, so the Matrix term sheet was pulled and we got some other VCs in. What happens then? When does the first product go out? When do we get product?

The money we raised from the first $3 million from Lucy and the other VCs really started drying up when we tried to build this peer-to-peer algorithm, which was never going to work. We kind of knew that, and we were like, “We need to do this the hard way.”

We really needed to plug our FX engine into interbank liquidity. Whether it was Goldman or J.P. Morgan, they weren’t going to take my calls. We needed to build it by getting licenses everywhere around the world and connecting to the local clearing infrastructure one by one. It was going to be hard, but that seemed like the only way we could do it.

We basically cold-called Macquarie. At 8:00 a.m., I remember calling a guy who took the overnight shift at Macquarie to cover the markets, because FX is a 24/5½ market. Tom took the call. He was a junior guy who could only work the night shift at the time, and he was about to finish work at 8:00. Somehow, I pitched him, got him excited, and he was willing to invest a whole team of engineers from Macquarie Bank to connect me to the interbank market so that I could get sub-2-basis-point liquidity from a cost point of view.

For the first couple of years, our FX price was literally trading back-to-back with Macquarie, because normally, with interbank liquidity, you can’t trade under $500,000 or $1 million. That’s how you trade on the interbank. I was able to convince Macquarie to build me a product where you could trade even $20 at a 2-basis-point cost price.

Wow.

And then that worked. I remember, even after Series A, when we raised $13 million from Sequoia, Tencent, and Mastercard, I went to pitch to Blaise[?], a friend I used to work with. I met him in Hong Kong and sat on one side of the boardroom, which had a 5-meter-long table. He wanted to sit on the other side of the boardroom, and I was like, “Dude, what is happening?”

I made the pitch, and he was like, “Come talk to me when you have a billion dollars in volume.”

That’s helpful.

I’m like, “Dude, now Barclays is a great partner, but we only started working together when I had $10 billion in volume or something.” Tom, the guy who took my Macquarie call, is now the head of distribution at Macquarie. A phenomenal pick from him.

Did we have product-market fit pretty much straight away after that?

No. I got the FX engine built out, and I needed a bunch of payment rails. I connected to a bunch of aggregators initially because I needed the coverage, and then I even connected to Currencycloud, which ultimately became a competitor later.

Essentially, I connected to a bunch of competitors to get me the coverage of the network, and I had the product going. But in terms of the customers we wanted to target, we initially targeted SMEs in Australia. We just never really figured out what the product was.

We built an invoicing product to allow them to sell around the world and get paid through a payment link. By integrating with a bunch of payment service providers, we still never really got product-market fit on that product. The customer acquisition cost for SMBs was too high, and we never really got product-market fit.

At that point, we knew we needed to raise more money; otherwise, we were going to be dead. So we basically went to raise money from Sequoia and Tencent.

Oh, and that was with a product we knew was going to fail.

What happens?

So, basically, I have a product that’s working, right? I know it’s not going to have product-market fit, but I need more money to figure out what the product-market fit is. I went to pitch Sequoia and Tencent, and one of the ideas was actually to pivot the product to an API product, servicing Tencent to power WeChat Pay global settlement.

When Chinese tourists came to London airports, they would pay using WeChat Pay, and Tencent would settle the merchants, doing the FX on the back of that. We were thinking we could do a lot better over the SWIFT network, and we could do a lot better than the Tencent department. The idea was maybe to pivot and leverage Tencent’s volume to grow the business. Knowing that the product was probably going to fail—we only had about 100 customers by that time—we were raising at a $60 million valuation with no revenue.

But how does that work? You know that this isn’t working. You know that it’s not going to work, and you’re going to have to figure it out. So you go to Sequoia and pitch what ideas?

I pitched the vision. I pitched the vision of building the largest payment network in the world, an alternative to SWIFT, and that fundamental infrastructure was going to be so important. That’s going to take years to build; that’s why we don’t have any revenue.

How did it go? How did the meetings go?

Obviously, I pitched Tencent at the same time, and I told Sequoia that Tencent might want to lead the round and kind of play the competition game. Sequoia was like, “Yeah, if Tencent is co-leading the round, we’re in.” But Tencent did all the IC and everything, and passed the RC.

At one point, I was super happy that this was going to be done. The founder of Tencent said, “Just go through a normal corporate approval process,” but the founder of Tencent didn’t approve after a 3-month process. The idea was that this was going to help Tencent do global WeChat Pay settlement, and then Pony Ma, the founder, was like, “Why can’t we build this ourselves internally? Why can a 10-person startup do a better job than us? We have hundreds of thousands of engineers.” The investment team didn’t know what to say.

So what happened?

Basically, the deal stalled. Sequoia wasn’t willing to invest until Tencent made a decision, and I was basically running out of money. The Tencent investment team was super helpful. They were like, “You have 1 opportunity to pitch to either the president, Martin Lau, or James Mitchell, the chief strategy officer. These are the 2 people who can convince the founder of Tencent to invest and basically approve the deal.” I waited for almost 3 months to be able to get a time slot to meet with James and Martin.

I remember we met with James Mitchell in Hong Kong on January 5, 2017. I told my team, “This would be the most important meeting of my life.” I tested the product—everything—until 3:00 a.m., and I told my CTO, “Nothing can go wrong during the meeting.”

I went to pitch, and it’s so funny because James had been at Goldman before, and he did the IPO of PayPal. He remembered that the majority of PayPal’s revenue actually came from cross-border payments. He didn’t really need me to convince him that much. He saw that this was a large enough market and that I was a good guy to chase the opportunity.

At the end, he was like, “Why don’t I take a look at your product?” I was like, “Yeah, let’s do that.” I demoed the invoicing product, which I knew was going to fail and wasn’t going to have product-market fit. But it was a working product, right? It was a prototype leveraging the same infrastructure—the infrastructure was the same—and I got a 404 on the spot when I clicked the pay button. My face just went blue.

I dodged it. I was like, “Maybe the link was blocked by the Tencent firewall.” Maybe it was, maybe it wasn’t. We never actually found out because the PSP we were using under the hood also had some bugs. We didn’t know whether the error was caused by the underlying PSP or by the Tencent firewall.

What happened with that?

He loved it. He was just like, “It doesn’t matter. It is what it is.” Then he went ahead and convinced Pony Ma to invest, so we got the investment that day.

Wow. Then obviously Sequoia and Mastercard also came in with Tencent. Do you mind that Sequoia was like, “Oh, we’ll only invest with Tencent”? I like investors who are conviction-driven. I don’t give a fuck who’s investing with me. I’m investing because I love Jack.

Well, I mean, this was Series A, right? This wasn’t a seed round. Normally, people would have product-market fit. I had zero revenue. So the idea was that Tencent was going to give me revenue, and Mastercard was also in the round and was supposed to give me revenue as well. Sequoia’s revenue conviction was based on the 2 other investors—Tencent and Mastercard—who were supposed to be the 2 biggest customers for us.

Was that the first near-death experience that you mentioned earlier?

I would say that was the second one. The first one was the VC that was supposed to invest, together with Lucy, and they didn’t wire the money until 5 months later, after they signed the term sheet. They were basically like, “Show me the demo. Show me the demo,” before they wired the money. This was in 2015, so the market was a bit—I don’t think it would be acceptable for any VC to do that today.

It is, but it’s not that long ago. It’s only 9 years ago. I agree with you totally, but it’s not 20 years ago. I bought out that investor in this round, by the way. I’m very happy about it.

Yeah, I know that investor. That’s a good one to buy out.

So, yes, completely. Okay, so we raised this money. We’ve got Tencent, we’ve got Mastercard, and we’ve got Sequoia. This is the fucking dream cap table. Now, does it just go off to the races then? Is it like a rocket ship from there?

No. We were supposed to have Mastercard and Tencent as customers. The Tencent deal took me 3 years after that point. It’s a big corporation, right? It just takes a long time.

It was the same thing with the WeChat Pay department. They were like, “Why can’t we build this ourselves?” So they ended up building essentially what Airwallex built themselves, and only used us as 1 of the liquidity providers. That was really not the product we wanted to sell to them. We just became 1 of the vendors they had, together with JPMorgan and other liquidity providers.

Mastercard was supposed to give us $1 billion in volume from the Mastercard Send product, but we got less than $1 million. There were so many high-risk transactions at the time that we had to literally offboard that part of the business.

So when does it start to go really well, Jack?

This was essentially the 3rd year since I started the company. I started in December 2015, so in 2016, the peer-to-peer algorithm failed. In 2017, the invoicing product also failed. In 2017, I raised the money from the Series A and started pivoting the product to an API-driven product to sell to large enterprises for global money movement. Tencent and Mastercard were supposed to be the customers.

We built a product for a whole year, but we ended up not getting any customers. We were running out of money again because we were very aggressive with hiring, so by the end of 2017, we were running out of money.

That’s where Square Peg came in. One of the inspirations for starting the business was the founder of Square Peg, who was also one of the most famous entrepreneurs in Australia. He started 1 of the biggest tech companies in Australia, called SEEK.com.au, which was the largest job marketplace in the world at one point. He was the idol of every entrepreneur in Australia, right?

Paul reached out and said, “We’d like to have a conversation.” We had a great conversation. He liked the vision and mission of the company, and he ended up leading a Series A extension—another $6 million—essentially giving us the breathing room to really take off the business.

That was still the vision: to build an alternative to SWIFT, the largest global payment network. It was the 3rd iteration.

I mean, to be fair, that is amazing. Again, suspending disbelief, you’re looking back now at a track record of—shit, the first didn’t work, the second didn’t work, the third didn’t work—but we’re still going to do this. So what happens then?

We raised the additional $6 million.

Yeah.

We were able to sell to other businesses besides Tencent and Mastercard, including a lot of tech companies. They started adopting the product, and we got a few companies sending tuition payments around the world. They were massive. We went from 0 to a billion dollars in transaction volume within 9 months.

Whoa, whoa, whoa, whoa. Pause. What? 2017?

This is—this is January 2018. We onboarded that customer, and in January 2018, we also onboarded SHEIN.

So I wish I had investors. SHEIN at the time was like a serious Series B company, and I really just had these 2 massive customers that I was riding on top of to go global.

Wow. Okay, so you had these 2 mega-unicorns just ripping, and they were driving you from 0 to $1 billion.

Yeah. I remember one day SHEIN needed to pay suppliers in China, and they gave us $20 million. Our partner in China was essentially a supplier for SHEIN, and they basically said that the volume had been lost to a customer between 2 of their customers. So it went from SHEIN using them directly to using us, and we were still using them under the hood, right? Obviously, we did the FX, and they just did the last-mile payment because they had the license in China and we didn’t.

They were like, “No, we’re not going to do it. We’re literally going to turn your rails off, and we’re going to keep SHEIN.” I basically had 48 hours to integrate with a new partner that was able to pay into China. Otherwise, I was going to fuck up my biggest customer—or my only customer at that time.

So you called up a new partner?

I called a new partner. I was like, “Let’s figure out the legal contract later. Let’s go live on Sunday night.” We basically started the integration on Friday night, worked 40 hours straight, and went live on Sunday night.

Jack, this whole conversation has been a continuation of literally me getting goosebumps at you having these 48 hours to save a SHEIN contract, which was the lifeblood of the business at that point.

Yeah. SHEIN was kind of 90% of the business at the time.

Okay. And so you go from 0 to $1 billion, and now you’re like, “We have a real business.”

Correct. Yeah. By the end of 2018, we had a real business. We didn’t have a lot; we probably had 100 customers, but they were all pretty big customers. So then we went out and raised more money.

No, before that, I literally started taking off in January. By April, Tencent and Sequoia said they wanted to lead another round. They basically led a $400 million pre-money round and invested $80 million, so it was a $480 million post-money valuation.

Wow. Did you get the question of commoditization?

Yeah, I did. But I think some of the greatest fintech investors missed Stripe because they were like, “Oh, it’s going to be a race to the bottom on price.” And actually, yes, but because we really went deep into the infrastructure, at that time we were still using a lot of PSPs like Currencycloud to get the coverage. We really started getting licenses in Australia, Hong Kong, the UK, and the US. We were going to have a deep regulatory moat, and we were basically the only provider in APAC at that time.

Maybe some other player was going to come out, but at that time there was no competition to do what we did in the entire Asia-Pacific region. We had all the big investors backing us, right? We got the Series B at a ridiculous valuation, again from the same investors, but we added a bunch of other investors.

Then, in October 2018, Stripe reached out to Airwallex. How does that work? Did John and Patrick send you a DM on Twitter? What does that look like?

Will Gaybrick, the CFO at that time—I think now he’s CPO—reached out to Sequoia, and he said he just wanted to have a conversation to see what we were up to.

Obviously, I’m a huge admirer of Stripe. Everything in tech would be like, “Stripe is the gold standard of developer-friendly APIs and documentation.” I’m a huge fan of what Stripe and John had built, and I was like, “If I ever get a chance to talk to Stripe, I’m all in to learn.” The conversation with Will went really well, and then all of a sudden Patrick reached out and wanted to catch up.

At that time, we were literally setting up a developer event in Shanghai, and he said he would fly to Shanghai to see me.

He flew to Shanghai?

Yeah, he flew to Shanghai, probably the first or second time he had been there. I don’t remember, but he flew to Shanghai to see me and my co-founder, and we spent a whole day together.

How was the day together?

We went through the product in the morning, and we talked about the whole vision for the company in the future. At that time, we were thinking about building merchant acquiring, essentially competing with Stripe, because Stripe wasn’t really in APAC at the time.

We had already built the payout rails and FX, and pay-in was just a natural evolution of connecting the end-to-end part of the platform. All of our customers that paid out to contractors, developers, suppliers, and tuition around the world needed pay-in, right? They processed online payments and offline payments, and we kind of had to do that.

Then Patrick basically said, “We’re going to build payout because we have all these pay-ins around the world and we need to do payout, and we haven’t built anything.” He was like, “It kind of makes sense. We either sort of work together, or maybe we should buy you guys.”

I was like, “That’s kind of weird. You have the best fintech company in the world talking about potentially buying you, and you’re literally just 1 year into the business.” Obviously, we had started more than 3 and a half years earlier, but the real product-market fit had only been there for about 10 months. We had really only just started getting product-market fit.

So what happens then? He says, “We should work together, or we should buy you.” What does he say?

He said, “Let’s just spend more time together.” So he started this whole document on a Google Doc, 10 or 20 pages long, and asked me to make comments. I made comments, and we just worked it out.

I was like, “Wow, the vision of the company in the next decade is very much the same.” We all wanted to build the AWS of financial services. Obviously, Stripe was much, much ahead of us, but this was before COVID. Stripe was a $9 billion company, very similar to the scale of Airwallex today.

I really liked Patrick. I was like, “This guy is so smart. He’s much smarter than me.”

Can I ask you what makes him so smart? The Collisons are always hailed as, bluntly, geniuses. What do you think makes him so smart from ideating with him and working with him on a Google Doc?

I mean, it wasn’t the Google Doc that made me think he was smart. He’s just so intellectually honest about everything, and he’s able to go deep in multiple dimensions. He reads about Chinese history; he knows Chinese history better than me. He knows about quantum physics, biology, and all these fields that I’ve never gone into. He’s able to talk about them for hours.

I’m just like, “How can 1 person go deep in multiple dimensions?” If you talk about fintech, I think I’m as good as these guys, right? But if you’re talking about biology, quantum physics, or Chinese history—I’m Chinese, and I feel ashamed that he knows more Chinese history than me. How can you read so many books and understand them so well? It’s like before AI.

Take me to the moment: how did they table a $1.2 billion offer?

It was essentially a complicated deal construct. Essentially, it was $800 million on the cap table, $350 million to me and my co-founders, and I think $50 million—or I think $25 million—to the core employees. So it was close to $1.2 billion, like $1.175 billion or something.

What happens then? You sit down with your co-founders. How does that conversation go?

He invited us to San Francisco, and we had a great conversation. At that time, I was almost convinced, and he sent his whole team to Melbourne. They did a whole week of due diligence with all the senior people from Stripe. I met with Claire, the COO at the time, and the whole team. I was really impressed, and I basically said verbally, “I think we’re going to do it.”

But in the back of my mind, I was thinking, “Are you really going to do it?” I flew back to Melbourne, and I was thinking about it for 2 weeks, trying to figure it out. I was 70% wanting to do it, but there was this voice in my head asking, “Are you going to do it? How are you going to do it?”

Ultimately, I was like, “Okay, if I sell the business…” I was 33 at the time, or 34 at the time. It was going to be a 5-year lockup, so I’d be 40, or close to 40, when I finished the lockup. What can I do as a 38- or 39-year-old?

Can I be blunt? How much money would you have made from the deal if you knew Stripe was going to get to $100 billion?

I would probably have made at least $3 billion. At that time, Stripe was going to raise at a $20 billion valuation, and we knew that we could probably raise another round at a $1 billion valuation or more. It wasn’t really the valuation; the financials weren’t really what I had been thinking about.

So why did you not sell?

I grew up in Australia. I also lived a very— I didn’t live a very luxurious lifestyle, right? So I didn’t need any money. This is not London, remember? This is Melbourne. There aren’t even any high-end shops, right? Billionaires and everyone else just goes to the same supermarket.

It’s a very socialized society, and I think with $200,000, you can live a pretty good life. I didn’t know what to do with the money anyway, and that’s not what I was thinking about at the time. I was really thinking about what was going to make me happy.

I went back to Melbourne and asked my co-owners, “Let’s just vote, because I really can’t figure it out.” Lucy said, “I don’t really care because my family is wealthy and I don’t need more money. I really enjoy this, and I think we should keep building.” My CTO, Jacob, said, “It’s really up to you, Jack. This is your mission, your vision, and we’re all here to help you. Ultimately, it’s your call.”

Max said, “I think I’m okay to sell. That’s a lot of money.” Good old Max. We couldn’t decide, so we asked our senior leadership team to vote. Surprisingly, only 1 person wanted us to sell. Literally, 90% of people said they thought we could build a bigger business.

So you fired that 1 person?

Well, that person joined Stripe. Even worse.

No.

Yes. That’s the whole story. We all kind of tried to hire her afterward, and I kind of sued her, and she sued me. That was a whole complicated story.

That vote was a very telling sign, wasn’t it?

I mean, it’s not like I think she’s that great anyway, so it’s kind of fine. We were just worried because she had so much proprietary knowledge of our network, and we were worried that she was going to give it away to Stripe. But that’s a long story.

I went back to Melbourne and changed my mind. I was like, “I don’t think I want to be doing another startup when we’re 38. I think I’m going to give this one a shot and put my whole life into it.” That’s it.

One thing that really inspired me from talking to and spending time with Patrick was that I asked, “What’s the long-term thing for Stripe or for yourself? Are you going to be here forever?” Patrick said to me that he was going to build Stripe for the next 20, 30, 40 years.

I’d never heard a founder tell me that he would dedicate his entire life to building a business. That was so inspiring to me. I thought, “That’s what I want to do.” We’ll build real economic infrastructure that changes the world, impacting millions of businesses growing on the internet or growing globally.

So we turned that down, and we were back to business, baby. We needed to scale volume. We had Shein, and we had this other large provider.

Was it now just all hands to the pump? Scale, scale, scale?

Yes. We got another $100 million from DST and a bunch of other investors.

When you raise $100 million and suddenly have quite a lot of money, is it difficult when constraints are removed and you can just spend? I didn’t understand what that meant at the time. I didn’t know what financial discipline was.

I didn’t have a budget. I was just like, “Hire as fast as possible. Just blow it all out.”

You didn’t have a budget?

Yeah. We went from more than 100 people to 600 or 700 people in a year. Then I realized our volume had grown, but our revenue wasn’t growing as fast. We really needed to raise another round.

The vision also started to evolve, especially after rejecting the Stripe offer. I thought, “Okay, we’re going to compete in the long term.” Obviously, Stripe is a payments-led business, while we are a banking-led business. At that time, though, we weren’t a banking business yet. We were a global money-movement infrastructure company.

We thought, “Okay, we need to become a true global neobank. We need to build our card-issuing infrastructure so we can issue corporate cards. We need to build merchant-acquiring infrastructure so we can handle the payment side of the money flow as well.”

We basically needed to evolve from a single-product company to a multi-product, end-to-end platform with infrastructure and software to support global businesses. I put most of the $100 million into building these new products instead of investing in the existing product. That was the biggest bet I made.

Essentially, you invested more than half the money you raised into a product that wasn’t going to generate any revenue for the next 3 or 4 years. Did that not strike you as alarming at the time?

Once we rejected the Stripe offer and decided we were ultimately going to compete, it kind of scared me that if I didn’t invest fast enough, we simply wouldn’t have a role to play anymore. So it was the right thing to make those investments.

We kind of did 2 things. We went all in on international expansion. We started opening offices in the UK, the US, and everywhere else. That turned out to be a disaster because we didn’t have product-market fit in any of those places. The international expansion basically failed because of product-market fit.

We weren’t hiring fast enough. We weren’t building enough product. We didn’t have a real product in the UK, but we hired a bunch of teams there.

How long did it take you to realize that the international expansion wasn’t working?

Pretty quick. You just don’t have any revenue because nobody is going to buy your product. So, 6 months later, you’re like, “Uh-uh. Cut.”

You didn’t cut?

I didn’t cut. I basically kept going because we had infrastructure there. We needed people to manage the infrastructure, and we kept trying. A lot of the people I hired were my friends, so we persisted through to product-market fit in those geographies.

So you just persisted through to product-market fit in those geographies?

Yeah. It took me 3 years to get product-market fit in the UK.

Wow, that’s a lot of money.

Well, it was a small team. We also trained a lot of people, so that was the mistake I made.

When you say that was a mistake you made, what was the mistake?

Bad hiring. I think we also didn’t have the product. We hired too early, and we didn’t really know what sort of people to hire. It was a combination of both.

What do you mean, you didn’t know what sort of people to hire?

I’m a product engineer. I really had no idea how to build a commercial organization. All we did was sell to large enterprises, right? We had a lot of VC networks in APAC, but when I came to the UK, I didn’t have the VC network. I didn’t really know how to sell to large enterprises. I didn’t have anyone opening the door for me, and we just couldn’t really sell the product.

The vision really evolved from a single-product company to a multi-product company, but it took 3.5 years to get the initial product-market fit. During those 3.5 years, you were too aggressive in international expansion while you didn’t have a good product, so you needed more money.

Yes. At that point, our last round was the $100 million with DST.

What happens?

We were running out of money again.

Great. Are you nervous when you’re running out of money?

Yeah. I was at SoftBank. SoftBank was the gold-standard VC. This was 2019. I flew all the way to London in October 2019, and SoftBank was going to lead the round.

Then the WeWork situation happened, and they stopped investing. They had done all the work, but the partner who was going to invest in us got fired. I was literally in a situation where we were going to die again if I wasn’t able to raise money.

What happens then?

I convinced the existing investors to give me a lifeline through convertible notes. DST and Tencent lent us the money. We raised essentially, I think, $70 million to $100 million in a convertible note, but the idea was that we would be able to raise another round straight after that. I needed to find an alternative to SoftBank.

Hedosophia was the answer. Ian from Hedosophia led our Series D to get us going. The funny thing is that COVID happened in 2020. When we were signing the SPA, we knew that because we had a business in China, the virus was taking off. This was in February 2020, and we were literally going through the due diligence process.

All the investors started asking me, “What is this COVID thing?” I didn’t know how to answer the question because I was thinking, “This is going to be really, really bad,” and I couldn’t say that.

You knew?

I knew it was really, really bad because I had employees in China, and they literally shut down the whole city and all this crazy stuff. I even sent a text message to the prime minister of Australia asking him to shut the border to China.

It just kept going. I remember that the week we actually closed the Series D, the US stock market tanked more than 10% 3 times.

This was the first time this had ever happened in U.S. history. The market went down 30%. I called Neil Shen and asked, “Do you think Ian Osborne is going to close, and would you close if you were in this situation?” Neil told me he really wasn’t sure. He said, “No one would know in this situation. It’s never happened before.”

I wasn’t sure, and nobody was sure. To the credit of Ian Osborne, he closed. What was that round? That was, I think, $1.7 billion valuation. This was the round after the convertible, so all the people who invested in the convertible got converted into the $1.7 billion round.

How big was the check?

I think it was $150 million. Obviously, half came through the existing investors, and Ian put in $75 or $80 million.

How was Ian?

He’s very behind the scenes. He’s very discreet. Hedosophia is a very secretive fund, and we weren’t allowed to put out a PR using the Hedosophia name. You would see a bunch of investors listed as leading the Series D, but Hedosophia was not named. I think they’ve changed that policy now.

Yeah, they’ve become much more public.

Yeah, they’re a little bit more public now. I think Ian sits on my board, and he’s one of the largest investors, but not many people know about it.

Has he been a great board member?

Yeah. He’s been investing in the company since 2019, for 5 or 6 rounds after that. He just kept doubling down, so I think we’re probably one of Hedosophia’s largest investments in terms of dollar amount.

So you closed that round, and we get going again?

Yes. We kept plowing away at these international markets. We were relentlessly bashing away at product-market fit in them, and we fixed it. It started looking really good.

When does the business really start humming?

In 2020, obviously, during COVID, our revenue was cut in half. That’s why I wasn’t sure whether they were going to close, because half our revenue was from tuition and travel, right?

What was your revenue at that point?

I think in 2019 we were at $20 million. Let me think about that again. We were only at $2 million in 2018, so we went to $10 million in 2019. We 5x’d the revenue in 2019, to $10 million. Then in 2020 we had $20 million, and in 2021 we more than doubled again, around 2.5x.

Okay. $2 million in revenue when Stripe did the $1.2 billion valuation. Yeah, and then—crazy. I said, “No, no, no.” Now you look like a genius, but if I were a VC on your board, I would have been supportive if you wanted to sell.

Well, from a Sequoia point of view, they invested $450 or $480 million.

I do. I do. It was only for about 3 months, and they made just under double the money because it was $800 million on the cap table, right? I totally get it. It doesn’t do much for them in that respect, given the fund size.

So we closed the Series D. We’re off to the races. What happens now?

Then COVID happened. We lost half our revenue, and we were really figuring out what to do. At that time, we started getting product-market fit on the SMB banking side. We built the infrastructure, started issuing corporate cards, and started getting the merchant-acquiring business built out, but we ultimately launched it in 2021.

The foundation of a global bank started to evolve. We basically went from spending the first 3 or 4 years building the best money-movement infrastructure in the world to building the next generation of a global bank—the future of global banking. That obviously took a lot of money and a lot of guts to bet on this new product, which only started generating revenue in 2022.

From 2019 through 2021, there was no revenue from any of these new products. They only started generating revenue in 2022.

With the board putting pressure on you?

Well, the business was still doubling every year from the existing product. In 2021, I started getting investors knocking on the door every single day. Greenoaks led a round in January 2021 at a $2.6 billion valuation, and Lone Pine led a round in June or July at $4 billion.

Do you have any of the company left? This is a lot of funding rounds.

Yeah, we raised $400 million in 2021. The valuation went from $1.7 billion to $5.5 billion. I was raising money basically every month. Then, toward the end of 2021, SoftBank was talking to me about leading a $1 billion round, and obviously we didn’t entertain that conversation.

Did you worry about the dilution?

At that time, I knew the vision was really big. You need a lot of capital to build a global bank, so it’s a balance. I just wanted to raise as much money as I could. Obviously, I only raised about $100 million at $5.5 billion. I should have raised more at that time.

Airwallex would have been dead without 2021. We raised $400 million, really well-capitalized the business, kept doubling, and had enough money to keep going. We raised a flat round in 2022 because at that time we were burning close to $200 million a year, and we weren’t really sure how long we were going to last. But we weren't profitable in 2023, and I realized that we could just keep growing the business.

We kept doubling the business in 2022 and 2023 while our headcount wasn’t growing. We never did a layoff, and we were able to continue growing the business by more than 100%. We basically never grew below 100% from 2015 to 2023.

Never grew below 100%?

Yeah, for 8 years straight.

Fuck.

We’re still growing 90% year-on-year. Last quarter, we reached about $500 million in ARR in August last year, then hit around $600 million in November and $700 million in January or February. The business can still grow insanely fast.

$700 million in January or February. I’m about to make a bold statement, given the volatility in the markets. If I project forward to the end of the year, your revenue at this rate is $900 million—more than $1 billion. Why did you do a deal at $9 billion? A 9x multiple is a public-markets multiple.

We raised the round at $6.2 billion, literally when it was announced last week or this week.

Yeah. Why did you do that deal?

We started the deal at the end of last year.

I’m sorry to be so blunt, but that’s like a 6x revenue multiple. I would have done that fucking deal.

People don’t really look at revenue multiples anymore, right? People are looking at gross profit. We’re doing about $450 million in gross profit this year, so essentially it’s 13 times this year’s gross profit. It’s not bad. If you look at it, that’s roughly the same sort of multiple that Stripe or Revolut are doing.

Yeah, I’m saying that’s a good deal for an investor to do. I think people don’t give you enough credit for the growth rate today. They don’t give you too much credit for the growth rate.

No, I don’t think so. I think people are really looking at public-market comps because of what happened in 2021. There are fewer investors out there who believe you can grow at 90% for a long period of time. In 2021, people got burned. Companies were growing at 100% and then went from growing at 100% to 20% in a matter of months.

I think investors just got burned through that experience, and they give you less credit for being able to grow at this high speed for a long period of time.

How much did you just raise?

We raised $300 million.

Are you still on the “I need to be fundraising every month” train?

No. I’m actually buying back Airwallex stock myself. I’m in the process of taking on $70 million in debt to buy Airwallex secondaries because I have so much confidence in the company.

No way. You’re taking out $70 million in debt?

Yeah, with some of my co-founders. We’re literally buying our own stock.

Wow. You’re buying it from early investors?

Yeah.

Wow. Do you get that at a discount? Can I join? That was a question.

Okay, that’s a joke.

Yeah, of course. No, no, dude. If you haven’t realized by now, I do these shows just for moments like that where I’m like, “Whoa, that is insane.” Fascinating. That is nuts—the growth rate of 100% a year for 8 years straight.

Can I ask: did you take secondaries out along the way?

I took some secondaries. It wasn’t a massive amount of money, but I did.

How do you advise founders on that? We mentioned 2021. A lot of founders took them out then, and I think they were wrongly chastised. I think they’re very good in a lot of cases. If you were to advise me as a founder—“Hey, Jack, secondaries”—what do you think?

I recommend that founders take enough secondaries so they can live a comfortable life. They don’t need to worry about how to feed the family, support the kids, or buy a house.

In Melbourne, I think the living standard is much lower than in London. In London, you need $20 or $30 million to live a very comfortable life. I think that amount is right for a late-stage founder, because you want the founder to be all-in on building the business rather than thinking about how to support the family, if you know what I mean.

I totally do. But for any founder, do not take out $20 million or $30 million from my round if it’s too early. I think timing also matters.

Yeah. Yeah. Yeah. I think, for a late-stage founder above a $1 billion valuation, $20 million or $30 million is a decent amount, but it’s not a ridiculous amount that you set aside for your life or anything. I think it’s just good for a founder not to think about money too much and just really focus on the vision.

Do you love being a CEO? You mentioned your product and engineering centrality as who you are. Do you like being a CEO?

I don’t like the everyday part of the job of a CEO. I like being able to control the destiny of the company, and I ultimately answer for the outcome of the company, the outcome for the customer, and the outcome for the employee. I want to have that control so I know that we’re heading in the right direction toward our vision.

I don’t like dealing with people issues, dealing with the policies, the procedures, and all that type of thing.

What did you not do in the Airwallex journey that, with the benefit of hindsight, you wish you had done?

A couple of things. Number 1, I hired the first 100 people at Airwallex by myself on LinkedIn. Obviously, there’s a lot of benefit to doing that, but I could have hired a good recruiter just to help me do the outreach and then give them access using my LinkedIn password. I didn’t need to do that myself.

Today, I could just get AI to do that. Do you not think so? Do you not think that was important in getting the first 100 right people with the right culture?

I think it’s important. You still need to do that as a founder, but I just don’t think you need to physically log into LinkedIn and send messages to 100 people every day.

Love it. Okay, so that’s number 1.

Yeah. I think, number 2, don’t overinvest in international expansion when you don’t have product-market fit, right? That could really put a lot of risk on your company. We were lucky that 2021 happened, and we were lucky that Ian closed a round in 2020 when COVID happened and stocks were down 30%. But I don’t think everyone is going to be that lucky.

I think the other thing is to really focus on and invest in culture early.

Did you ever have a moment when the culture was broken, and what did you do to fix it?

It’s a lot of pain when the culture is broken. We had a lot of issues because, in the first 4 or 5 years, we hired a lot of people with a lot of great experience. They were from a bank, they were from Citibank, and they had built the SWIFT network before. They joined and told me, “You guys know nothing. What you’re going to do doesn’t work. We need to do blah, blah, blah.”

None of those people worked. None of the people who thought they knew how to build a startup worked. Ultimately, it’s not about experience; it’s about competency. It’s about curiosity, determination, resilience, belief in the vision, and passion.

I think we should have hired those curious, determined, optimistic people from early on, but we didn’t. So we had to fire all of them. That’s a tough, tough decision, and it really slowed down the company. We had bad press about it. There was a lot of pain to go through.

Should you always take the highest price in fundraising?

No. I think you should always prioritize what gives you the biggest leverage: leverage on brand, leverage on hiring, and leverage on commercial opportunities.

Do venture firms’ brands make a material difference?

Yes. Only the top 5 make a difference. Having Sequoia makes a big difference—a huge difference, whether I like it or not.

Why would you not like it?

Ultimately, you want to work with the best investor—not only an investor, but also a friend, someone you get along with and like. It’s not saying I don’t like the investor in Sequoia. I’m just saying that you shouldn’t choose the brand over the people.

Which investor do you not have that you would like to have?

I wish I had someone like Michael Moritz who invested in me—a true visionary investor who just supported the founder from day 1. I think Michael Moritz played a very important role in Stripe’s success. He was waving the flag for Stripe in the early days of Stripe in Silicon Valley, saying, “John and Patrick Collison are going to be the next Sergey Brin or Larry Page. They’re going to build a trillion-dollar company,” blah, blah, blah.

I don’t think I had that support.

Have you met him?

Yeah. I mean, Michael Moritz invited me to his home and tried to convince me to sell the company.

Oh, wow.

I wish I had an investor who would do that for me.

Love that. How was that?

It was a beautiful home, and it was a nice conversation.

And it didn’t convince you?

Well, his argument made a lot of sense. He was saying, “Why don’t I just keep building and maybe sell later?” Like, what now? I haven’t really figured out what I do want to do with my life yet. He was like, “The earlier you can compound, the faster you can build a trillion-dollar business.” It kind of makes sense.

When I ask you about a founder you deeply admire, other than the Collisons, who comes to mind first?

I really like Elon. I think what he has done is ultimately push humanity forward.

If you could put all of your money into 1 company other than Airwallex, which company would you put all of your money into?

I don’t know. I don’t want to put all my money into 1 company because I never put all my money into 1 company. I would put half of my money in SpaceX.

I’d do SpaceX. I’d do a third. I’d do OpenAI, SpaceX, and then Revolut.

I don’t know about Revolut. I mean, that’s my competition ultimately in the future.

I’ll put some money in Stripe.

You put some money in Stripe?

Yeah.

What’s the hardest thing about your role today?

Making decisions knowing that there’s more than a 50% probability that it’s going to be a wrong decision.

You should be a venture investor. Do you like investing?

I don’t think I’m a great investor. I don’t really know how to assess early-stage founders very well.

Why do you think that is?

I think that before product-market fit, it’s really just based on people’s personalities. I don’t know how to make an investment decision based on people’s personalities or the history of people. That’s why I said I wouldn’t be able to invest in myself. I just haven’t seen enough data to build that confidence.

What worries you that you think not enough people are spending time on?

Generally, people are making decisions based on the knowledge they have, and I think generally that is not the right thing to do. The biggest mistake you make is from making a decision based on the knowledge you don’t have.

Penultimate one for you. You’re in London now. Are you impressed by London's tax scene? What do you make of it?

I think it’s better than Melbourne. I love the global nature of London, and I’ve so far enjoyed meeting a lot of entrepreneurs. I think it’s going to be an exciting place for you living here.

Yeah. It’s one of the best cities in the world to live in, apart from the fact that it’s very expensive. Everything else is pretty good.

Okay, final one for you. Airwallex in 2035, 10 years out. Where are you then?

I hope we have built one of the largest global payments and banking platforms to power modern businesses around the world. I hope we have built a bigger business than Citi or HSBC because, when we succeed in doing that, millions of businesses around the world will benefit from the success of our mission. Public or not, it doesn’t matter.

Would you like to be a public company at some point?

I think inevitably we all have to think about that. But right now, we’ve been really heads-down building.

Dude, this has been one of the most awesome, fun, fascinating stories. Thank you so much for sharing it with me, and I cannot tell you how much I’ve enjoyed it.

Thanks, Harry. I really enjoyed the conversation.