The Fintech OG's from TWIF
00:04:31 路 Leif Abraham, Julie VerHage-Greenberg
[00:04:31] S2: Yeah, our audience is a little bit more upmarket. Like we serve like the top 20% of millennials, you can think of it. That's like our core of a user. And so our users are a little bit more sophisticated, a little bit larger account balances and so on. And that kind of lends itself to a slightly more sophisticated product as well. I think where Robinhood goes a little bit more mainstream and a little bit more mass market, we're a little bit more focused on the top 20%. And so, like if you think of, for example, account transfers, we get the most transfers from like a Schwab or Fidelity. [00:05:00] S0: Interesting. Okay. And then Jack, I wanna. So you start you were running a coffee shop before you started Airwallocks. And if my memory serves me correctly, you also have had acquisition offers before from large companies. Talk me through turning down an acquisition and like continuing to build this business and the time frame for when that was happening and stuff, too. Like, what were some of the things going through your head then? How did you evaluate that? I have so much more I want to learn about all of this because it just seems like, especially recently, MA's really been picking up in the fintech space.
00:05:39 路 Jack Zhang
[00:05:39] S1: Well, that that happened a while ago. I think end of 2018, that's when Strive offered to buy us at $1.2 billion. And uh very attractive offer because at that time we only did just over $2 million in revenue in 2018. And obviously the companies did more than 10 million in revenue in 2019, but either way, it's still a very small scale compared to to where we are today, and certainly a very attractive offer from a valuation point of view. But ultimately, we think that we had a very different approach coming to solving the problem in the market. That if you're thinking about the problem we're solving is that 20, 30 years ago, we think about global business that you really think about as Nestle, Coca-Cola, Nike, that type of businesses. But since the rise of the internet, mobile internet, cloud, now AI, so every third generation of this technology innovation creating this massive amount of businesses, like internet native, and the nature of this business also are globally native, right? So a mom and dad shop selling on Amazon, or they open a Shopify store or creator transacting on the working for bigger platform, and they all kind of global businesses from day one. They have revenues around the world, and they have suppliers and employees or vendors around the world, and they have expenses around the world. So that just the nature of the internet is borderless, and that just created generations of generations of modern businesses that are globally native. And and everyone just wanted to be the platform to service in these global businesses. And to do that well, you need both payments and banking. And when you look at acquisition offer, strive was really much of uh a kind of a money-in-app. Essentially, it's just really focused on online payments and growing the GDP with the internet. And then we have a quite different mission is to be the payments and banking platform uh to empower modern businesses to ultimately become to build in the future of global banking. And to do that, it's we need a different sort of mentality. We need to be regulated around the world. And and we need to not only build uh the money in app, we need to build the banking app and the the money out app as well. So that kind of gives us a very different perspective to the mission and and also just stand alone with the a hundred billion dollar plus opportunity in front of us.
00:07:59 路 Jack Zhang, Julie VerHage-Greenberg, Leif Abraham
And and we decided to basically continue to build on our own, and that's because the the opportunity is too big. And I think if you're looking at like the the folks that we're competing, like for HSBC or Citibank, and it's just fascinating to be able to compete in when and build a larger business than those folks in the next decade. [00:08:19] S0: Yeah, so much has changed since then. And so at that point, you got that acquisition offer, and life was roughly around the same time that you were starting public. How did you guys meet? [00:08:29] S2: How do we meet? We met through I think it was ahead of Sophia event or so, I think was the first time we met. [00:08:36] S1: But yeah, met in there at Vegas around Lonnie. Yeah. [00:08:41] S0: Where so many FinTech friendships are born. But also, if it was around like, you know, sounds horrible, by the way. It does until you're like, if unless FinTech, you're like, no, that actually makes a lot of sense too. Lots of friends made over drinks in the black jacket. [00:08:58] S2: That sounds better. That sounds much better. [00:09:01] S0: Or at an awesome concert that FT partner throws, which they need to do like a really good one again this year. They have to be crushing it with all of this like MNA and IPOs, like Steve, we we need some bit, you know. [00:09:14] S2: Exactly. What's up? Yeah, dare, dare him a little bit. Come on.
00:09:14 路 Leif Abraham, Julie VerHage-Greenberg
[00:09:14] S2: Exactly. What's up? Yeah, dare, dare him a little bit. Come on. [00:09:16] S0: I think he's a little scared. Like post Malone was pretty legit. So topping post Malone a couple years ago is gonna be a little bit tricky, but he can do it. Okay. Diving back in here, it sounds like both of you had some passion around what you started, right? It wasn't necessarily just like knowledge around it, but it does feel like there was passion involved. And I feel like you have to have that. Because I'm sure you guys each have a lot of other ideas, like, oh, someone should do this for a startup. But unless you have that, just like I have to do this type thing, sort of like as a reporter, I remember people saying, don't write a book unless you just feel like you have to write. And I feel like it's very similar to doing a startup. Don't do a startup unless you have this idea and you just have to solve it. So talk to me a little bit about when you first started brainstorming and getting this urge to do that idea and what did tip you over the edge. Like, no, like I need to be the one that goes to solve this. I can't let someone else do it for me. Either one of you can go first too.
00:10:17 路 Jack Zhang
[00:10:17] S1: I'm not sure I had that moment. I tried many things before Airwalls, actually. I I was an FX algorithmic trader and market making, building market making platforms and various investment banks and hedge funds before and on the side. I was doing a lot of side hustle. Started about a dozen businesses in real estate architecture, design, importing, exporting, trading, coffee businesses and burger chains and like olive oils and red meat, it's like anything you can think of that I olive oils. I haven't heard that story. Yeah, yeah, with exporting olive oil from Australia to South Asia and just like general Asia countries, and because there's a booming in demand and olive oil switching from peanut oil. So I made a lot of money doing that. But uh not none of those businesses, actually, everything is profitable than airwalls. It's funny. We only start getting profitable now after a decade of building it, but those businesses are profitable from day one and just not as interesting. It's not able to scale that much. And in 2012, while I was starting the coffee business, I actually wanted to start a business very similar to Square, building opponent sales and payment system. That's when AFC payment just started. And I was quite fascinating about that. And then I pitched the idea to my CTO and co-founder, and and he saw like a QR code coming out of China, and he's like, dude, I think QR is gonna take over the world is so easy. And I was debating between like AFC and QR, and then turned out to be neither neither of us are right. And QR did take over China and some of the Asian countries, and where the rest will become like this touchless, sort of this sort of carless AFC payments-dominated ecosystem. But if we have started, we might become a bigger company by by this time because we'll start the company three or four years earlier. I've been very just open-minded of exploring ideas where I do know I wanted to start something in technology because I was an engineer by trend and I always run code and I want to build a business that scale it into creating a lot of impact. I was when I was doing a coffee business, I was like, like even we have thousands of stores. If the coffee business gets shut down tomorrow, I'm not sure how many people are gonna miss that. I'm not sure people are gonna care about that much.
00:12:27 路 Jack Zhang
Yeah, you build great coffee, yeah, great coffee, but it doesn't really create that much of an impact to people's life. Because people just have many, many alternatives. Where if we build fundamental economic infrastructure in a world that powering millions of entrepreneurs and businesses to grow their business globally, beyond the border, to help them to operate efficiently, now especially with AI, to create an alternative finance function for them, to save them time and costs, and to give them true autonomous to focus on that, building their own mission globally, that to advance the economy, that that's something a lot more meaningful. That's something a lot more significant. And I feel I'm like at least kind of building something significant and important. I think similar to what life's building, life could talk about it, why he's doing it.