The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
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.
00:51:33 · Jack Zhang, Harry Stebbings
[00:51:33] S0: Yeah. Who is kind of 90 of the business at a time. Okay. [00:51:37] S2: And so we do the 0 to a billion, and now we're like, we have a real, real business. Correct? [00:51:42] S0: Yeah. This is like by end of twenty eighteen, we have a real business. We have not a lot, we have probably like a 100 customers, but all kind of pretty big customers. [00:51:51] S2: And so then we go out and raise more money? [00:51:52] S0: No, before that, literally I started taking off in January by April. And then Tencent and Mastercard Tencent and Sequoia said, we want lead another round. So they basically lead at a $400,000,000 pre, they invest $80,000,000 so a $480,000,000 post. So they basically but at that time, the business had no revenue still, like a very little revenue. But the volume is like doubling, tripling every month. And we had like all the big investors backing us, right? And we got the Series B at a ridiculous evaluation, again, from the same investor, but we added a bunch of other investors. Imagine you from near death in January 2018 to then in October 2018, Stripe reached out to us. [00:52:35] S2: Stripe reached out to buy you. How does that work? Does John and Patrick send you a DM on Twitter? What does that look like?
00:52:35 · Harry Stebbings, Jack Zhang
[00:52:35] S2: Stripe reached out to buy you. How does that work? Does John and Patrick send you a DM on Twitter? What does that look like? [00:52:40] S0: Will Gabrick, the CFO at the time, I think now he's CPO, he reached out through Sequoia. And he said, I just want another have a conversation to see what you guys up to. And obviously, like, I'm like a huge admirer of Stripe, right? So every fintech out there will be like, you know, Stripe is the golden standard of developer friendly APIs and documentation. And I'm a huge fan of what Stripe and John have built. And I was like, oh, if I ever get a chance to talk to Stripe, yeah, I'm all in to learn, right? The conversation with Will went really well. And then all of a sudden that Patrick reached out, wanted to catch up. At that time, we were literally setting up a developer hub in Shanghai. He said he will fly to Shanghai to see me. Yeah, so he went fly to Shanghai to literally to see me and my co founder. And we spent the whole day together. [00:53:30] S2: He flew to Shanghai?
00:53:30 · Harry Stebbings, Jack Zhang
[00:53:30] S2: He flew to Shanghai? [00:53:31] S0: Yeah, he flew to Shanghai. Probably the first time he went to Shanghai or second time, I don't remember. How was the day together? We went through the product in the morning and we just talked the whole vision about the company and the future. At that time, we're kind of thinking about going to build merchant acquiring, essentially competing with Stripe, because Stripe was not really in APAC at the time. And we already built the payout rails and the FX, and the pay in is just a natural evolution of connecting the end to end part of the platform because all our customers that are paying out to contractors, developers, suppliers, tuitions around the world that need pay in, right? They need process online payment and offline payments, and we kind of have to do that. And then Patrick basically said, Oh, 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. Kind of makes sense. We either sort of work together or maybe we should buy you guys. And I was like, kind of weird. You know, like you have the best fintech company in the world that talk about potentially going to buy you. And you literally just like one year in the business. I mean, obviously we started for more than three and a half years at a time, but the real product market fit only been like ten months. You really started even getting product market fit. [00:54:45] S2: So what happens then? Is it, we should work together or we should buy you? What do you say?