The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:45:24 · Harry Stebbings, Jack Zhang
[00:45:24] S2: And he loved it? What happened with that? [00:45:27] S0: No, he's just like, Oh, you know, it doesn't matter. And then he actually went ahead and I thought it's like a gone, the deal. But he actually went to commence Pony to invest. So we got the investment the day after that. Wow. And then, obviously, you know, Sequoia and and then Mastercard also came in with Tencent. [00:45:44] S2: Do you mind that Sequoia will, like, oh, we'll only invest with Tencent? I I like investors who are conviction driven. I don't give a shit who's investing with me. I'm investing because I love Jack. [00:45:53] S0: Well, I mean, this is Series A, right? This is not a seed round. This is Series A. Normally, people will have product market fit and have zero revenue. So the idea was that Tencent is to give me revenue. And Mastercard was also in the round, and Mastercard is supposed to give me revenue as well. So Sequoia's revenue conviction are based on to the other investor, which is Tencent and Mastercard, supposed to be the two biggest, largest customer for us. [00:46:17] S2: Was that the first near death experience that you mentioned earlier?
00:46:17 · Harry Stebbings, Jack Zhang
[00:46:17] S2: Was that the first near death experience that you mentioned earlier? [00:46:21] S0: I would say the second one. Because the first one was, you know, the VC that kind of supposedly invest, together with Lucy, they didn't wire the money until like five months later after they signed the term sheet. So they were basically like, show me the demo, show me the demo before they wired the money. I mean, is like 2015, so the market is a bit... I don't... I think, you know, it would be a bad thing for any VC to do that today. [00:46:45] S2: It is, but it's not that long ago. Like, it's only nine years ago. Agree with you totally, but it's not twenty years ago. Yeah. [00:46:51] S0: I bought out that investor in this round, by the way. I'm very happy about it. [00:46:55] S2: Yeah. I I know that investor is a good one to buy out. So, yes, completely. Okay. So we raised this money. We've got Tencent. We've got Mascot. We've got Square. This is the fucking dream cap table now. Does it just go off to the races then? Like, is it like rocket ship from there?
00:46:55 · Harry Stebbings, Jack Zhang
[00:46:55] S2: Yeah. I I know that investor is a good one to buy out. So, yes, completely. Okay. So we raised this money. We've got Tencent. We've got Mascot. We've got Square. This is the fucking dream cap table now. Does it just go off to the races then? Like, is it like rocket ship from there? [00:47:10] S0: No. As I said, I mean, we we supposed to have, you know, Mastercard and Tencent as a customer. The Tencent deal took me three years after that point. It's big corporate, right? It just take a long time. The same thing from the WeChat pay department. They were like, why can't we build it ourselves? So they end up built like essentially what AirWatch built themselves and only using us as one of the liquidity providers. So that was really not the product we want to sell to them. And we just become like one of vendors they have together with JPMorgan and other liquidity providers. And Mastercard's supposed to give us a billion dollar volume from the Mastercard Send product, but we got less than a million dollar. And it's just so much high risk transaction at the time. We had to literally offboard that part of the business. So when does it start [00:48:00] S2: to go really well, Jack?
00:48:00 · Harry Stebbings, Jack Zhang
[00:48:00] S2: to go really well, Jack? [00:48:01] S0: Essentially, is like the third year I'm starting the company. Like 2015 started. Like I started a bit late, like December 2015. So 2016, the peer to peer algorithm failed. The invoicing also failed in 2017. And 2017, I raised the money from the Mercedes A and started pivoting the product to an API driven product to sell to large enterprises for kind of global money movement. And then Tencent and Mastercard are supposed to be the customer. And we build a product for a whole year, we end up not getting any customers. And then we're running out of money again because we were very aggressive hiring. And so by end of twenty seventeen, we're also running out of money. That's where SquarePak came in. So I started the business one of the inspirations is because of the founder of SquarePak. And he also one of the most famous entrepreneur in Australia, he started one of the biggest tech company in Australia called seek.com.au, which is like the largest job marketplace in the world at one point. He was the idol of any entrepreneur in Australia, right? So I admired him for a long time. And Paul reached out, said, we like to have a conversation. And we really kind of had a great conversation. He liked the vision, the mission of the company, and he ended up leading a Series A extension. Another $6,000,000 essentially gave us the bracing room to really take off the business. [00:49:19] S2: And that was on the vision too? [00:49:20] S0: To build an alternative to SWIP to the largest global payment On
00:49:20 · Jack Zhang, Harry Stebbings
[00:49:20] S0: To build an alternative to SWIP to the largest global payment On [00:49:24] S2: the third iteration. Yes. Yes. I mean, to be fair, that is amazing. I mean, like, again, suspending disbelief. You're looking back now at a track record of fuck, the first didn't work, the second didn't work, the third didn't work. So what happens then? We raise the 6,000,000 more? [00:49:39] S0: Yeah, and that we're able to sell to other businesses other than Tencent and MasterCard, like a lot of tech companies basically [00:49:47] S2: And they started adopting. [00:49:48] S0: They started off. And that we got like a few companies that sending tuition payment around the world. And they are massive, right? So we went from zero to a billion dollar transaction volume within like nine months. Woah. Woah, woah, woah, pause. What? 2017? This is January 2018. We onboarded that customer. And January 2018, we also onboarded Xian. So, you know, I wish I have invested Xian at the time. They were like a serious big company. And I just really just have these two massive customers that I'm riding on top of them go global. [00:50:23] S2: Wow. Okay. So you had these two mega unicorns just ripping, and they are driving your zero to a billion.
00:50:23 · Harry Stebbings, Jack Zhang
[00:50:23] S2: Wow. Okay. So you had these two mega unicorns just ripping, and they are driving your zero to a billion. [00:50:29] S0: Yeah. I remember, like, one day, Xian basically need to pay suppliers in China, and they gave us $20,000,000 And our partner in China was the supplier for Xian. And he's basically saying that volume got lost between two of their customers, right? So from Xi'an using them directly to using us, and we're still using them under the hood, right? But obviously, we do the FX and they just do the last mile payment because they have the license in China. We didn't. They were like, no, we're not going to do it. We're literally going to turn your reels off, and we're to keep Xi'an. And so I basically have forty eight hours to integrate with a new partner that able to pay into China. And otherwise, I was going to, you know, fuck up my biggest customer or the only customer at that time. [00:51:09] S2: So you call up a new partner and [00:51:10] S0: you're I like call our new partner. I was like, let's fix out the legal contract later. Let's go live on Sunday night. So we basically start integration on Friday night, worked forty hours straight, went live on Sunday night. [00:51:22] S2: Jack, this whole conversation has been a continuation of literally me getting goosebumps at you having these, like, forty eight hours to save a Xi'an contract, which is a lifeblood of the business at that point. [00:51:33] S0: Yeah. Who is kind of 90 of the business at a time. Okay.