Original Title: "Exclusive Interview with Airwallex Founder Jack Zhang: Tackling the Most Challenging Aspects of the European and American Markets"
Original Author: Xu Tan, Tencent Finance
Editor's Note: The last camp on Mount Everest is "Camp Four," at an altitude of 7,950 meters, and above 8,000 meters is the limit zone. This serves as a metaphor for the extreme conditions many companies face today. The "Altitude 7950" column focuses on those who lead companies through limits and strive to reach the summit. Their practices can resolve many people's confusions and dilemmas.
The growth curve of Airwallex is a grand narrative of reshaping the global financial system, testing the judgment of those investment giants who have heavily bet on it. In 2015, Airwallex founder Jack Zhang opened a café in Melbourne but discovered the pain points of cross-border payments due to international remittances—complicated processes and high fees. Jack Zhang's philosophy is "as long as you find the pain points, you can create value." However, at that time, he had no product, only a vision. It was akin to holding a PPT and needing to convince investors that the vision he described was a future reality.
His vision was to reconstruct the global payment settlement system. This sounded quite crazy. It meant breaking down national barriers, technological barriers, and industry monopolies. After much hesitation, Shiao Yibo, a partner at Matrix Partners China, withdrew his investment commitment. Indeed, which is the true barrier and moat of the global financial network—algorithms or licenses? No one had a grasp on surpassing the SWIFT global settlement system that had existed for over 50 years.
The SWIFT settlement system, born in the 1970s, required international remittances to go through 5 to 6 banks, taking several days and incurring high fees. Jack Zhang's vision to disrupt this system was to "create a cloud-native global financial network." Ultimately, through technological breakthroughs and compliance strategies, this vision was gradually realized. Airwallex achieved direct integration with local clearing systems and card networks, allowing for direct connections to global local clearing networks, significantly shortening the payment chain, improving payment efficiency, and ensuring that corporate funds reached their destinations smoothly.
A key point is that financial licenses and compliance capabilities are the passports for a fintech company to operate globally. Airwallex has obtained financial licenses in over 60 countries/regions, making the vision of a global financial network a reality. On this basis, Airwallex further expanded its multi-currency matrix and embedded financial services, providing full-link services. Companies can open accounts in over 70 countries/regions in just 2 minutes. This has made global companies like SHEIN, TikTok, and JD.com among the 150,000 clients of Airwallex.
For the past 10 years, both Airwallex and Jack Zhang have operated like a high-speed war machine. To expand the business, Jack Zhang said, "I once visited 14 countries in 21 days." Airwallex has rapidly grown into a fintech unicorn with an annual transaction volume of $130 billion and a valuation of $6.2 billion. The lineup of investors is impressive—Tencent, Sequoia, Hillhouse, DST Global, Visa Ventures, and others.
Recently, the investment community predicted that Airwallex is "the next company to reach a valuation of $100 billion." Recently, the "Altitude 7950" column produced by Tencent News and Tencent Consulting invited Airwallex co-founder and CEO Jack Zhang to discuss his tumultuous entrepreneurial journey and the path to globalization.
Below are excerpts from the conversation between Tencent News and Jack Zhang:
I. Early Struggles in Australia
"Altitude 7950": In 2001, you moved to Melbourne, Australia, at the age of 16 to attend high school and even worked to earn your tuition. What was that experience like?"
Jack Zhang: I remember it very clearly; I couldn't even afford a 50-cent chocolate bar. When I first went to Australia, my family's situation was okay. But after graduating from high school in Australia, some financial issues arose at home, and the financial support wasn't as good as before. I had already been accepted into university, but I had to work to survive. I would wake up at 4:50 or 5:00 in the morning to catch the earliest train, take a one-and-a-half-hour train ride, transfer to a bus at 7:30, ride for over half an hour, and then walk about 20 to 30 minutes on a mountain road to a lemon factory in a suburb of Melbourne called Lilydale to move lemons, box by box, working 10 to 12 hours a day. The temperature was quite high, usually between 38 to 40 degrees Celsius.
"Altitude 7950": Why was it so hot?"
Jack Zhang: Because Australia's summer vacation is from December to March, which is the hottest time of the year, and the lemon factory is on a mountain, so the temperature was consistently high.
"Altitude 7950": How much could you earn in a day?"
Jack Zhang: It was relatively good earnings because if you worked in a restaurant, you might earn about $10 to $12 an hour. At the lemon factory, it was $15 an hour, and it was cash. But it wasn't sustainable. After starting university, I also worked in a bar from 4 PM to 11:30 PM, and then from midnight to 8 AM. Or I worked at a gas station, working about 16 hours a day, which was quite tough.
"Altitude 7950": Do you think this had any impact on shaping your character?"
Jack Zhang: This experience probably instilled some resilience in my character for future entrepreneurship. Life always has its ups and downs.
"Altitude 7950": You got into the University of Melbourne, majoring in computer science, and then worked as a software engineer at the National Australia Bank (NAB). This must have been a crucial experience for your later founding of Airwallex?"
Jack Zhang: Yes. In fact, my first job had a significant impact on me. Right after graduation, I worked in the investment department of an insurance company in the UK. At that time, my team members each had some unique strengths. My boss was not originally a mechanical engineer, but he built a 37-meter-long sailboat from scratch over seven years, learning everything himself. He even lived on that boat for two years, sailing across the ocean from Australia to Indonesia.
Several of my other colleagues were cycling enthusiasts, commuting to work at an average speed of over 50 kilometers per hour, reaching amateur competitive levels. This had a considerable influence on me; you can learn something from scratch and create something, which is very encouraging. As long as you have passion, you can pursue it. But this was just the beginning; I later engaged in many different small businesses, whether it was import-export, real estate development, or running a café. The money I made from side businesses could be 10 to 20 times what I earned from my main job. However, I never left my main job—writing foreign exchange trading software and risk management trading software at the bank—to keep myself in touch with the latest technology.
"Altitude 7950": You were constantly doing side businesses or looking for new opportunities, as if you were never prepared to live a comfortable and stable life?"
Jack Zhang: Yes, I remember when I told my parents I was going to resign from the National Australia Bank, they thought I was crazy. They felt it was a great job, very stable, with a good salary. Why would I want to quit? When I was 14, I saw my good friend die in a car accident while we were cycling together; he was hit right next to me. I thought he had broken his leg, and the next morning at 7 AM, I went to the hospital to comfort him, only to be told he had passed away the night before. That shock made me realize that life is fleeting; you never know when it could end, so you should live in the moment and maximize your life experiences.
The second thing is that when I was just 30 years old and had a daughter, I looked at her birth and felt that life is beautiful, but I hadn't done anything to make her proud. Although I made a lot of money, I hadn't changed anything or contributed to social progress; I was just staring at the screen trading every day.
So at 30, I was still unwilling to settle and wanted to keep trying. Coincidentally, I had two co-founders who were doing similar things. My CTO partner, Dai Xijing, had failed in five startups but almost joined Ele.me as their CTO and was close to being the fifth employee at Musical.ly, but ultimately chose to start his own business despite previous failures. My other partner, Max, who did product design, had been doing various businesses with me, including real estate and cafés. Although he was originally an architect, what he did later had little to do with architecture; he was always trying different things.
"Altitude 7950": I'm curious; your CTO sounds particularly impressive, especially in the tech field, and they are all very ambitious young people. What makes them choose to work with you, and why are you the CEO?"
Jack Zhang: First of all, I proposed the idea, and they probably felt that I had a higher sensitivity to business. Later, the company went through three or four near-death experiences, and each time we miraculously survived. They might think that no matter what happens, the hardest challenges always fall on me. The toughest issues are handled by me, while their lives are a bit more comfortable, haha.
II. As Long as You Find the Pain Points, You Can Create Value
"Altitude 7950": In fact, the establishment of Airwallex was primarily due to the pain points you discovered while running the café?"
Jack Zhang: Yes, because my partner's English name, Max Li, is the same as a name on an OFACT blacklist, so every time he made a personal remittance, it was often blocked by intermediary banks. Each bank would charge a fee, which also slowed down the remittance process, creating a very poor experience. I thought, why should there be an intermediary bank network for remittances? Why can't we directly connect to the local clearing systems of every country in the world and create a clearing network like the cloud, where everything is point-to-point clearing?
During my time at the bank, I realized that the technical debt they had accumulated over the past few decades made innovation very difficult. The second question was whether the market was large enough; this was originally a multi-trillion-dollar market, large enough. What I needed to do was to ensure that I was strong enough to outperform them, in which market I could outperform them, and with what products I could outperform them.
"Altitude 7950": How did you design the product to surpass the SWIFT system?
Jack Zhang: We built a completely new system. First, we established a global financial services infrastructure, which is our core advantage. We directly integrated with local payment systems instead of relying on slow and expensive third-party networks or other partners, allowing for faster transaction speeds, lower fees, and stronger control over global funds. Currently, our API platform helps businesses easily complete global payments, fund management, currency exchange, and multi-currency account operations, avoiding the manual inefficiencies of traditional banks. Additionally, in terms of regulation, we have accumulated a lot of knowledge about regulatory frameworks and understand the onboarding processes in various jurisdictions worldwide, ensuring that businesses comply with local laws and regulations as they expand globally.
"Altitude 7950": When you first sought investors, you must have had many failures. How did you persuade them at that time?
Jack Zhang: When we first started raising funds, we talked to some VCs in Australia and domestically. Basically, all the VCs in Australia rejected me. The Chinese VC was Matrix Partners, and they had already given me a term sheet and signed it, but then Shiao Yibo (a partner at Matrix Partners China) suddenly said he wanted to call me, and after the call, he said they wouldn't invest.
"Altitude 7950": Why?
Jack Zhang: I talked a lot about some algorithms related to foreign exchange trading, and he felt that the algorithm itself was not a competitive barrier, which was indeed not wrong. However, I think at that time, as a newly established startup, we didn't have a clear understanding of how to solve this problem. I also didn't believe that a founder could have everything figured out so clearly at such an early stage, still in the PPT phase.
"Altitude 7950": You had no product, only a vision. Convincing investors must have been a challenge.
Jack Zhang: We also spent a lot of time talking to Sequoia China, Tencent, and Mastercard. There were many ups and downs during this process. I flew to Tencent's headquarters in Shenzhen to talk with James (Tencent's Chief Strategy Officer), who felt that what we were doing was more suitable for a foreign entrepreneur. He then persuaded Pony (Tencent founder Ma Huateng). Sequoia kept saying that as long as Tencent invested, they would invest. So, we started fundraising in September 2017, and by the time we closed in March of the following year, we only had a little over two weeks' worth of money left in the account, and the company was on the brink of death.
"Altitude 7950": Did you have any mental barriers when trying to persuade a top investor?
Jack Zhang: There weren't any barriers. Sometimes I felt that the moment was quite critical. For example, I clearly remember meeting James (Tencent's Chief Strategy Officer) on January 5, 2017, inside the Tencent headquarters building. I can recall every question he asked me during those 30 minutes. There are certain moments in life that are extremely important. Overall, through these communications, there were still opportunities. Each investor has a different sensitivity to the business. For instance, Yuri Miller (founder of DST) asked me questions that were quite profound, asking about my childhood, what my parents did, and all the questions were related to personal character, without asking anything about the business.
"Altitude 7950": Your current competitor Stripe offered $1.15 billion to acquire you in 2018? At that time, Airwallex was on the brink of death.
Jack Zhang: Yes, we were on the brink of death. At that time, Patrick, the founder of Stripe, flew to Shanghai to talk with us. I verbally agreed, and they sent a term sheet, which was a very good offer. I could immediately receive hundreds of millions of dollars in cash and 1% to 2% of Stripe's stock. I stayed in San Francisco for two weeks to think about this. At that time, I felt that I had just started my business for a little over three years and hadn't truly experienced the joy of entrepreneurship. I would have to work at Stripe as an employee for five years. I was 33 years old then, and after five years, I would be 38, with no time or energy left to start another company. That would mean my entrepreneurial journey would essentially be over.
Moreover, for me, whether I made hundreds of millions or lost hundreds of millions wouldn't help humanity at all; it would ultimately just be a P&L (profit and loss), a zero-sum game. I could only say I was smarter than others, but I couldn't claim to have made any contributions to society, which is why I still wanted to pursue entrepreneurship.
"Altitude 7950": So entrepreneurship is not driven by money, but by vision?
Jack Zhang: Yes, in your short life of just a few decades, you should do things that give you a greater sense of fulfillment, so that when you grow old, you won't have regrets.
"Altitude 7950": Your first angel investment was from Lucy Liu, and there are rumors that she became New Zealand's richest woman because of it. Can you tell us the story behind that?
Jack Zhang: In 2015, after work, I went to check on the café I had opened, and at that time, I met a girl who was Max's friend, Lucy Liu. During dinner, I told her that I didn't want to continue with the café and wanted to quit to create a platform like Airwallex. Due to her years of experience in the financial industry and keen investment instincts, she said she could invest $2 million for a 40% stake. I was quite surprised because it's rare for someone to make such an offer on a first meeting, and she seemed quite serious. The next day, we went to the University of Melbourne's law school at 8 AM, as she was also from there. We talked until around 11 AM, and she basically confirmed that she would invest $1 million for a 20% stake in the company, which was originally her money for buying a house.
Even more astonishing was that on Monday, without drafting any documents, I received a text saying that $1 million had been transferred to my account. I thought this was one of the most successful investments in the world; it was quite remarkable for a young woman in her twenties to have such courage. I asked her why she believed in us, and she said, "I believe in myself."
III. Experiences and Lessons in Global Development
"Altitude 7950": Many Chinese entrepreneurs are going overseas now. What abilities do you think they underestimate?
Jack Zhang: Chinese people may have the strongest execution capabilities in the world, along with a spirit of hard work and perseverance. Shen Nanpeng once said, "I don't invest in Chinese companies; I invest in Chinese entrepreneurs." He said that Chinese entrepreneurs are not like trees that stop growing once they reach a certain height; they are like "animals" that can migrate according to different environments around the world. I believe many Chinese entrepreneurs, if there were no language barriers, could succeed anywhere in the world. Many successful founders of good companies in the U.S. are also Chinese.
"Altitude 7950": For Chinese companies going overseas, the pitfalls you encountered are particularly instructive for them. I remember you mentioned that entering a new country is like starting a new business. Does this mean experiencing multiple failures?
Jack Zhang: Yes, for example, in the UK market, we encountered significant issues in integrating our product with local market practices. We didn't support many local user habits. For instance, in the UK accounting system, many use Xero, Sage, and NetSuite. When they do local clearing, they not only use BACS (UK Bank Automated Clearing System) but also CHAPS and Fast Payment. You need to meet all their scenarios, which means you have to fully support all their local clearing systems to satisfy the transaction scenarios of businesses. This took a lot of time and effort.
Additionally, local market expansion requires very strict customer acquisition processes. We only focus on three industries: e-commerce, technology, and travel. We use business development (BD) to first acquire the top 1,000 customers, targeting some well-known companies that have a certain influence in the industry. After establishing a market foundation with these customers, we then start investing online and in channels, which is a lesson we learned after many failures. In the UK, we failed the first and second times, and only succeeded the third time. The same was true in Australia; we succeeded only on the third attempt.
"Altitude 7950": What do you think were the main reasons for your early failures in overseas markets?
Jack Zhang: People, product-market fit, and the methods of BD market expansion were not right. We still need to focus on making these niche customers love your product and be willing to recommend it. Also, our initial hiring was not appropriate, which wasted over a year of time.
"Altitude 7950": What wrong decisions have you made?
Jack Zhang: There were quite a few, especially in hiring. We fell into many pitfalls, particularly in the early stages, where we relied too much on experience, seeking people with financial or banking backgrounds, especially those who had been executives in banks. All the executives we hired with such backgrounds ultimately failed, so we had to correct our mistakes quickly.
"Altitude 7950": When you see certain signals, what prompts you to tell yourself to correct mistakes quickly?
Jack Zhang: For example, if an executive talks about things that are very inconsistent with your company's philosophy. For instance, they focus on their title rather than what contributions they can make to the company. Additionally, all our executives must first be independent contributors (ICs). For example, I am a product manager; even if one day the company no longer exists, I can still apply for a job as the best product manager in the world. That is your IC capability. I require every executive to have strong IC capabilities because many executives, after many years in management positions, become people managers and forget what their professional skills are.
"Altitude 7950": Bureaucracy can easily arise this way.
Jack Zhang: Bureaucracy spreads very easily. Later, we found that those who succeeded were often those who had no experience at all. In hiring, we only look for three things. First, why do you want to join us? What is your intrinsic motivation? Is it just to change jobs, get a raise, and get promoted, or do you genuinely want to join us and believe in our vision? Second, do you have the basic problem-solving abilities? This problem-solving ability may not come from experience; sometimes, having no experience in a new field allows you to approach a problem from an engineer's perspective. Third, we look at your raw intelligence, which also determines whether you have curiosity. When you encounter problems, do you ask the right questions to identify and solve them? Have you engaged in deep thinking?
"Altitude 7950": How do you assess someone's problem-solving ability before they even join?
Jack Zhang: I ask about their past experiences and what they think the most difficult problem they solved was. I pose questions like, "Do you know how GPS works?" Most people generally don't know how GPS works. But by asking this question, you can be surprised by the other person's reaction. I've seen many candidates, when faced with a question they've never heard before, their first reaction is, "Why are you asking me this? I refuse to answer; I have such good experience, why should I answer this question?" That is a very poor trait, indicating that when they encounter difficulties, their first reaction is not to eagerly embrace the problem and think of solutions, but rather to say, "This has nothing to do with me," which is a very rejecting state. You can see from how a person answers questions whether they are suitable for a startup or a tech company.
"Altitude 7950": Startups face many difficulties; what they need are people who embrace challenges.
Jack Zhang: I prefer people who think deeply and those who think from first principles. I consider myself a perfectionist. For example, I can find a font size of 11 in a long article with a font size of 12 in a second. I pay great attention to these details. I also have a bit of obsessive-compulsive disorder; if something isn't finished, I must complete it. My home is spotless; for instance, if someone moves my toothbrush even slightly, I can immediately tell that it has been moved. So, once when something was stolen, I immediately noticed because I saw that the position of my wallet was different. The good aspect of this personality is that you want to achieve perfection. The downside is that you might focus too much attention on some details.
IV. Tackling the Most Challenging Aspects of the US and European Markets
"Altitude 7950": The US and Europe are important markets for you, but when you first entered these markets, you had no brand recognition and faced strong competitors. How did you capture this market? What was your approach?
Jack Zhang: We tackled the most challenging aspects at the top level. First, our product had to be competitive enough to ensure our costs, efficiency, and user experience were the best. Second, the team was completely localized, with local hiring to do local work. Third, we tried to leverage our customers to help us create our brand because we are a platform for entrepreneurs to operate globally, and we hope to use more of our customers' and entrepreneurs' stories to resonate with more users.
Ultimately, you will find that when users buy a product, there is an emotional aspect beyond rationality. Therefore, we hope that when we market, we not only consider the functionality, efficiency, and user experience of our products but also the emotional impact our brand has on users.
"Altitude 7950": Are there any existing patterns in the US and European markets that Chinese companies looking to globalize can learn from?
Jack Zhang: The US and European markets place a strong emphasis on branding, especially in finance and B2B, where a high level of trust is required. At the end of 2023, we sponsored the McLaren F1 team, which increased our brand recognition by nearly 60% within six months. This was a very efficient approach, as it allowed us to combine the McLaren brand with ours to enhance brand effect and quickly boost recognition and trust.
"Altitude 7950": You started your business in Melbourne in 2015, and by 2023, you had fully globalized. For Chinese companies looking to go overseas, should the initial choice be limited globalization or complete globalization?
Jack Zhang: I think it depends on the type of company. For example, Toutiao (ByteDance) might be the best example of a Chinese company globalizing successfully because it is a B2C product. It can rely on a very centralized R&D team and a marketing team to quickly achieve globalization. Only after reaching a certain level of globalization do they start hiring local teams. B2B companies, on the other hand, may need to fully globalize much earlier, especially in the context of complex geopolitical situations, requiring earlier planning.
"Altitude 7950": In 2018, your company was already leading in Asia. Why make the decision to fully globalize in 2023? This is a more challenging move.
Jack Zhang: There wasn't a particularly special decision. Since 2018, we first targeted markets in Australia, Hong Kong, mainland China, and the US. After that, we expanded to the UK, Europe, Singapore, Canada, Japan, and South Korea, and later to South America and the Middle East. Essentially, we hope to distribute our business according to the global GDP rankings.
"Altitude 7950": You recently completed a $300 million Series F funding round, and Airwallex's valuation reached $6.2 billion. Over the past few years, you have raised $1 billion. What do investors see as your differentiated barriers and moats?
Jack Zhang: The company does burn a lot of money, over $150 million a year. What we didn't anticipate was that not only could we maintain over 100% growth in 2022 and 2023, but our business also quickly turned profitable. The recent fundraising was driven by the enormous opportunities we see in AI. AI has created many new businesses, logics, and products from the ground up around the world. We can leverage this opportunity to develop our own financial large model, hoping to fully automate financial management globally. We aim to have an Agentic AI product to handle customer reconciliations, financial compliance, financial analysis, and more.
"Altitude 7950": You just mentioned tariffs; what opportunities do you see there?
Jack Zhang: We have been laying the groundwork for this for a long time. We have acquired local payment licenses in Mexico, Brazil, Indonesia, and Vietnam, and we already have our own payment products. We can allow users to open bank accounts in 70 countries within two minutes, while the same process with Citibank or HSBC might take months. Therefore, whether in technology, user experience, or infrastructure, we are far ahead of those legacy global banks. The global technological revolution of AI and the fundamental recreation of productivity far outweigh the impact that geopolitical issues can have on human society. Even if "tariffs" (disputes) have limited social impacts, the influence of AI and the internet on humanity spans decades or even centuries. It fundamentally creates new productivity from the ground up of human economic models and fundamentally changes the economic models of human society.
"Altitude 7950": I'm curious about what drives you to try various things and experiment. What gives you this trait?
Jack Zhang: I grew up in a county town, in the fields, quite freestyle, catching fish and such. I was raised by my grandparents, who spoiled me; I could do whatever I wanted without much constraint. Later, when I moved to the city, I faced some unfair treatment, feeling that my rural accent was a bit strange, etc. I went to many different cities, and in each place, there was some regional discrimination, which might have helped me.
"Altitude 7950": So, it's not harm but help?
Jack Zhang: After experiencing harm, you realize there's nothing to be afraid of, so isn't that a form of help?
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