Benevolent Disruptors
00:18:47 · Chris Corbishley
[00:18:47] S0: Yeah. And I'd love to touch a bit in more detail on the on AI finance layer that, you know, one of the things we've observed is actually this, we haven't seen this kind of AI native fintech wave emerge in the last three years. If anything, actually, is the, the big players, large consolidators that have managed to innovate and, and consolidate fast enough to, to create agentic payments to to actually dominate the market. And one of the things we've been seeing, we've been observing obviously in in public markets, now private markets is this huge concentration in the hands of a few. This it's almost like a steepening of the power law amongst a few players that can dominate. And and I I again remember over the last five to ten years of investing in fintechs, we we were all trying to hit one of these different wedges. You know, the corporate cards player in Europe, you know, we do the pay hawk, a penny lane, know, maybe a lending business. And we just quickly saw, particularly Airwallex actually just start to cover the whole stack, and it was purely that bet on that first principles thinking, as well as answering customer demand that got you there, which is a bold bet, but it certainly paid off.
00:19:51 · Jack Zhang
[00:19:51] S1: Yeah. I mean, like, a lot of them, you know, from a VC point of view, doesn't make a lot of sense. People always try to buck you in one category. Are you a spend management or corporate card provider? Are you a global NIO bank? Or are you payments provider? Because that's kind of what people observe and seeing. And, you know, we essentially are bold enough to say, Hey, you know, we don't think that we should be categorized in any of these verticals. We think by first and first, there should be a single platform and financial operating system for these global companies and somebody should be there. And then just like how Citibank or JPMorgan been servicing these Fortune 500 companies and there needs to be a new generation where global bank do the same for global company. And the definition of a global company have fundamentally changed from the like of Nestle Coca Cola twenty, thirty years ago to now, any AI startup is a global first company. Any company even selling on Shopify is a global company all the way to Airbnb, Google is a global company. I think technology democratizing the definition of going global from day one and the financial infrastructure need to be, you know, doing the same. And that is the mission of Airwallex is building that future of the global banking and by first principle, creating that sort of the single platform to empower these entrepreneurs and business builders to access global markets from day one, rely on the Airwallex to do everything essentially in finance. And do you
00:21:13 · Chris Corbishley
[00:21:13] S0: think some of these single product players are effectively backing themselves into a corner? I mean, you know, we've seen well, we're gonna see more with the Stripe IPO filings at some point, but they've been hiring we've on a bit of a hiring spree, including members of of our investment universe, who have given a bit of intel in terms of, you know, something like 90% is just is payments. And the target by h two next year, which is very ambitious, is to take that more to 60% payments, 40% other value add services, such trapped capital, crypto, anti fraud, etcetera. But in a way, their core business really is so dependent on on this this payments of structure. Similarly with Ramp, it's still very much a corporate cards player, which is in in strong antithesis to an Airwallex. And do you think these folks have kind of backed themselves into a corner by not diversifying fast enough?
00:22:01 · Jack Zhang
[00:22:01] S1: I think the the benefit of these guys playing the AI in The US as the largest market. Right? So that the market is good enough. You see, if you become the largest sort of leader in that category in such a, you know, the biggest market in the world, that you could build a very big business in the market, which is what, you know, Ramp and Stripe are able to do. I think, obviously, you know, I think Stripe is much, much bigger scale at this stage. And they also build amazing brand in the developer ecosystem, which is, you know, a very, very strong moat, right? Where, let's see, the other player have less of a moat. But if you're looking at folks in Europe, right? So there's a lot of these vertical FinTech player kind of try to do the same and then never actually achieving the same outcome. Is because the market is smaller and the complexity is higher that, you know, Europe is not one market, it's like 2,030 markets, right? So it's very different to do the corporate card and spend management in Germany versus France versus, you know, where we're sitting Greece or The Nordics or the spend of the world, right? So there's so many complexity from a local sort of ERP and ecosystem and then, you know, on the integration standpoint, so many sort of different rules there. And, you know, if you wanted to do banking, you have to get French RBN for French business, and you need German RBN for German businesses. So I think that you kind of have to thinking long term and thinking about doing a lot more difficult things in like the Europe or the APACs of the market where the market is very sort of segregated. And that is the past that Airwallex True is that because we don't have the luxury of going on one bet in one sort of big vertical in a very big market. So that's why we took a different path. And now we're kind of big enough and have enough scale to go after multiple products in multiple markets at the same time. Right? So now we're kind of targeting to getting a million customers by 2030, making about 20,000 sort of revenue per customer. If we achieve that successfully, by 2030, that's a $20,000,000,000 top line company. Right? So it's extremely ambitious goal to to achieve.
00:24:11 · Chris Corbishley
[00:24:11] S0: Mhmm. And then before finishing off on the more personal element of your journey, which is always, I think, what's fascinating for most, I I did want to touch on two things you mentioned. One is is Agensic and AI kind of versions of fintech and global payments, and whether that does indeed come from the existing challenges that have emerged in the last five, ten years, or if you're terrified that there's a whole new wave of AI fintechs waiting on in the eaves. But related to that and to your point about this kind of concentration, do you feel like the way that the Airwallex story has unfolded has meant that you've been able to do more good than other players by being a global business, by focusing on corridors that are notoriously hard to reach? Do you think you've had more impact than than, say, a Stripe, than a sort of more generic payments kind of corporate cards player, for example?
00:24:58 · Jack Zhang
[00:24:58] S1: I think organic payments and stablecoin are probably the two biggest topic in the sort of fintech world of the last couple of years. Right? So I think if you're looking at stablecoin, I think the biggest challenge is regulation and compliance, right? So, and also there's an economy scale from a liquidity and some market efficiency sort of perspective, but the biggest sort of barrier was still compliance and regulation. And it's a sort of a basket of mix of good players and bad players. And it's very hard for people and general public to differentiate the difference. And I think that's creating even extra complexity for the industry. And by thinking like a first principle, does it make sense for everything to move 20 fourseven in real time and it's very cost efficiently. That, of course, doesn't make a lot of sense. But the question is, you know, you can't really just carve out something to say, hey, that is real time. That is, you know, frictionless. You know, just talking about moving money on chain. And that is, you know, I think that is the narrative that a lot of these crypto native guys sort of created. It's almost like a bit of a de saving, you know, from a public point of view. Right? But you need to think about and also a lot there's a lot of ideologies saying, hey, the world should just move it on chain. But but guys, you know, the, you know, the world is like, still have a lot of country, you know, like, it's still cash. Right? I mean, there's we've been trying to do cashless for the last fifty years and we still haven't able to do so. Just think about when the world gonna move to on chain a 100%. I mean, of course, you can have audiology, but you also need to, as a founder or entrepreneur, you have to think about the reality of where we're sitting today. You know, there's $7,000,000,000,000 or more processing on the FX market a day and on the SWIFT network as well. So the thing about in ten years' time, can 10% of that seven or eight or even $10,000,000,000,000 a day move into on chain, right? And that'd be a pretty good situation, right? That's like trillion dollar a day. It's massive already. And even you do achieve that, you still have the vast majority, 90%, which is still fiat. And how do you kind of connecting that kind of stablecoin or the on chain world to the fiat world?