The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
01:09:12 · Harry Stebbings, Jack Zhang
[01:09:12] S2: right? Dude, I totally get it. It does not do much for them in that respect. And their fund size, totally. Okay. So we closed ahead of Saphir. We're off to the races. What happens now? [01:09:22] S0: Then COVID happened, right? So that we lost half our revenue, and we were really figuring out what to do. At that time, we start getting product market fit on the SMB banking portal. You know, we build the infrastructure. We started to issuing corporate cards. We start getting the merchant acquiring thing kind of build it out, but ultimately launching 2021. The foundation of a global bank started to evolve. I was the first three, four years of just basically building the best money moving infrastructure in the world to build the next generation of a global bank, right, build the future of a global banking. And that obviously took a lot of money, a lot of got to bet on this new product that only start generating revenue from 2022. So from 2019, 2020, 2021, there's no revenue for all this new product. Only from 2022 that's not generating revenue. [01:10:09] S2: So Were the board putting pressure on you because there's a lot [01:10:11] S0: of results? Well, the business is doubling every year from the existing product. And then 2021 happened. And I just got investor knocking on the door every single day, right? So Grand Oaks led a round in January 2021 for 2,600,000,000 LonePilot led a round in June, July at $4,000,000,000 [01:10:30] S2: Dude, I'm not being rude. Do you have any of the company left? This is a lot of funding rounds.
01:10:30 · Harry Stebbings, Jack Zhang, Harry Stebbings
[01:10:30] S2: Dude, I'm not being rude. Do you have any of the company left? This is a lot of funding rounds. [01:10:35] S0: Yeah. We we raised $400,000,000 in 2021. Like, the valuation went from 1.7 to five and a half. Like, every month I'm raising money, basically. Like, then you raise, like, three rounds. And end of twenty twenty one, SoftBank was talking to me about, you know, leading an $8,000,000,000 round. And obviously, we didn't entertain that conversation. [01:10:53] S1: Do you [01:10:53] S2: not worry about the dilation? [01:10:54] S0: At that time, I know the vision is really big. How much capital is required to build a global bank? It's going to be in a balance. I just want to raise as much money as I can. And obviously, I only raised like 100 out of 5.5. I should have raised like more at a time. But I think Air Wallets will be dead without 2021. We raised $400,000,000 We're really well capitalized. The business kept doubling. And we had enough money just to keep going. And obviously, we raised a flat round in 2022 because at that time, we were burning close to $200,000,000 a year. And we weren't really sure how long we're going to last. But we weren't profitable in 'twenty three. And I just realized that we can just keep growing the business. We keep and then even in 'twenty two, 'twenty three, we keep doubling the business. And we keep doubling the business while our headcount is not growing. So we never did a layoff. And we able to continue to grow the business more than 100%. So we basically never grow below 100% from 2015 to 2023.
01:10:54 · Jack Zhang, Harry Stebbings, Harry Stebbings
[01:10:54] S0: At that time, I know the vision is really big. How much capital is required to build a global bank? It's going to be in a balance. I just want to raise as much money as I can. And obviously, I only raised like 100 out of 5.5. I should have raised like more at a time. But I think Air Wallets will be dead without 2021. We raised $400,000,000 We're really well capitalized. The business kept doubling. And we had enough money just to keep going. And obviously, we raised a flat round in 2022 because at that time, we were burning close to $200,000,000 a year. And we weren't really sure how long we're going to last. But we weren't profitable in 'twenty three. And I just realized that we can just keep growing the business. We keep and then even in 'twenty two, 'twenty three, we keep doubling the business. And we keep doubling the business while our headcount is not growing. So we never did a layoff. And we able to continue to grow the business more than 100%. So we basically never grow below 100% from 2015 to 2023. [01:11:53] S2: Never grew below 100% for eight years straight. [01:11:56] S0: Yeah. Fuck. And we're still growing 90% year on year last quarter. [01:12:00] S1: You grew 90% last quarter. [01:12:02] S0: Yeah. We went to, like, $500,000,000 ARR in August last year, then hit, like, 600 in November and 700 in sort of January and February. And the business just can still grow insanely fast.
01:12:02 · Jack Zhang, Harry Stebbings
[01:12:02] S0: Yeah. We went to, like, $500,000,000 ARR in August last year, then hit, like, 600 in November and 700 in sort of January and February. And the business just can still grow insanely fast. [01:12:16] S2: 700 in January, February. I'm about to say a bold statement given the volatility that we have within markets. If I project forward to end of year revenues, your end of year revenues at this rate is like 900? More than a billion. More than a billion. Why did you do a deal at 9,000,000,000? 9 x is is a public markets multiple. [01:12:36] S0: Well, we raised around 6.2, like, literally when announced last week or this week. [01:12:41] S2: That was at 6.2? Yeah. Why did you do that deal? [01:12:45] S0: Well, we started the deal end of last year. And, you know I'm [01:12:48] S2: so sorry to be so blunt, but it's like that... That's like a six x revenue multiple. [01:12:52] S0: Like Well, I mean, people don't really look at Jack, [01:12:54] S2: I would have done that fucking deal. [01:12:56] S0: I mean, people don't really look at revenue multiple anymore. Right? People are looking at gross profit. You know, we're doing $450,000,000 gross profit this year. So essentially it's, you know, 13 times of this year gross profit. I mean, it's not bad. I mean, if you look at that, that's kind of the same sort of multiple Stripe or, you know, the Revoluters are doing. [01:13:14] S2: Yeah. I'm saying that's a good deal for investors to do. [01:13:17] S0: And I think people are on... Like, Li Chenli don't give you too much credit on the growth rate today. They don't give
01:13:17 · Jack Zhang, Harry Stebbings, Harry Stebbings
[01:13:17] S0: And I think people are on... Like, Li Chenli don't give you too much credit on the growth rate today. They don't give [01:13:22] S2: you too much credit on the growth rate? [01:13:24] S0: No. I don't think so. I think people are really looking at public market calm and, you know, because of what happened in 2021. So there's less investors out there believe that you can grow in 90% for a long period of time. Imagine like in 2021, right? People will go burned. People all growing 100% and just went from growing 100% to like 20% in like months. Yeah. I think people just like, investors just got burned through that experience. And think people just give you less credit that you can grow at this high speed for a long period of time. [01:13:52] S2: How much did you just raise just now? [01:13:54] S0: We raised $300,000,000 [01:13:56] S2: $300,000,000 Are you still on the 'hey, I need to be fundraising every month' train? [01:14:00] S0: No. I'm actually buying back the Airwalla stock myself. So I actually in the process of taking a debt of $70,000,000 to buy Airwalla secondaries. No Because I just have so much confidence to the company. [01:14:13] S1: No way. Yes. You're taking out a $70,000,000 debt. [01:14:17] S0: Yeah, with some of my co founders. Yeah, we are literally buying our own stock. [01:14:22] S2: Wow. You're buying it from early... [01:14:24] S0: Yeah, early investors. Wow. [01:14:26] S2: Do you get that [01:14:27] S0: at a discount? We haven't done that yet. Let's see. [01:14:29] S2: Can I join? That was a question.
01:14:29 · Harry Stebbings, Jack Zhang, Harry Stebbings
[01:14:29] S2: Can I join? That was a question. [01:14:34] S0: Yeah. That's what I a joke. Yeah. No. [01:14:36] S2: Of course. No. No, dude. If you haven't realized by now, I do these shows just for moments like that [01:14:42] S1: where I'm like, woah. That is insane. That is nuts, dude. The growth rate of a 100% a year for eight years straight. [01:14:51] S2: Can I ask, did you take your secondaries out along the way? [01:14:54] S0: I took some secondaries, not a massive amount of money, but I did. How do [01:14:58] S2: you advise founders on that? We mentioned 2021, a lot of founders took them out then, I think they're wrongly chastised for them, I think they're very good in a lot [01:15:05] S1: of cases. If you were to advise me as a founder, Hey, Jack, secondaries, what do you think? [01:15:10] S0: I recommend founders take enough secondaries so that they can account for life, right? They don't need to worry about how do they feed the family, how do they support the kids, how do they buy a house. In Melbourne, I don't I think the living standard is much lower than London. I think in London, you need like 20,000,030 million dollars to live a very kind of comfortable life. I think that amount is right for a late stage founder. Because you just want the founder to be all in building the business rather than thinking about how to support the family, if you know what I mean. [01:15:41] S1: I totally do. But for any founders, do not take out 20,000,000 or $30,000,000 from my round. If it's too early, I think also timing matters.