00:51:20 · Henrique Dubugras, Jack Zhang
[00:51:20] S0: And you had money from family? [00:51:22] S1: I didn't know at that time, right? So basically, this is on Friday, and then she just keep talking about it and getting a bit serious. She's like, hey, why don't we just meet up in law school back in Melbourne Uni tomorrow morning at eight and we talk about this seriously? So she basically had a few million dollars from her parents and her husband's parents, and they want to buy a property in Melbourne. So this is the money that they want to use to buying properties. And then we basically talked from eight to eleven ish, and even her husband really against her investing us. And we basically got a verbal term sheet agreed. She will invest $1,000,000 at $5,000,000 post for twenty percent of the company. And on Monday before... This is all before I even started a company. I haven't even resigned. On Monday, '11 I got a million US dollar wire to my personal bank account. [00:52:15] S0: That's [00:52:15] S1: crazy. There was nothing signed. No company incorporated. [00:52:18] S0: That's crazy. [00:52:19] S1: This is like a girl I met the first time. [00:52:22] S0: Insane. And that wasn't your first million, though. Right? Because none of that was your money. It was company money, but, like, you had made more than 1,000,000 at this point.
00:52:22 · Henrique Dubugras, Jack Zhang
[00:52:22] S0: Insane. And that wasn't your first million, though. Right? Because none of that was your money. It was company money, but, like, you had made more than 1,000,000 at this point. [00:52:28] S1: Yeah. Yeah. I made a lot more than 1,000,000, but I... Number one, you know, I don't think I can take the money out because of my my relationship with my my ex. And and, also, it's a lot risky, but the the probability of the money gonna be disappear. So I wasn't prepared to putting up, like, a million US dollar into the business. [00:52:45] S0: Yeah. That's crazy. Yeah. So she invested, and and then how... But, you know, did she come work for the company? Like, how did that work? [00:52:51] S1: Yeah. Because I feel kinda bad that, you know, I took her money, then I was like, what about if this goes to zero? And, like, maybe I can invite her to work for the company so that even went to the zero, and... Which is 99% of the chance. And she at least knows that we worked, like, 200% so that we're not, like, wasting her money. [00:53:12] S0: And did you actually believe it kinda, you know, more more likely than not was gonna go to zero, or in your heart you thought it was gonna work? [00:53:19] S1: 99% of the chance it's gonna go to zero. [00:53:21] S0: Interesting. Yeah. Yeah. Interesting. [00:53:23] S1: Because I have no idea how to do this thing. You know? [00:53:26] S0: Yeah. Okay. So, you you know, you raised the money. And what was the first product or first insight?
00:53:26 · Henrique Dubugras, Jack Zhang
[00:53:26] S0: Yeah. Okay. So, you you know, you raised the money. And what was the first product or first insight? [00:53:31] S1: The first product has completely failed. Essentially, that to do global money movement, we have to solve f x first. And then to solve f x, we have to get the best price. And the idea was to do peer to peer. So for example, if I have a bunch of people in Australia paying people in Brazil and I have a similar amount of people in Brazil paying Australia, I can net it off. I can match the I can market making. But in reality, when we do the algorithm in simulating, I think when you have more countries, right, you have multiple dimensions, that's increasing the number of matching in an order of more attitude. But when we actually, while the code did that simulation, this is after we raised money from Lucy, and we started raising $2,000,000 more from venture capital in Hong Kong. And we realized algorithms never going to work. To get to, like, the trading volume that we needed to actually do matching within a day so that the payment's not so late, we need multiple billions of dollars of trading volume in this very concentrated corridor, which we're just never going to get to work. But we're still leveraging the idea to raise an extra $2,000,000 at $10,000,000 post while knowing the idea didn't work. [00:54:46] S0: And why did you move to Hong Kong?
00:54:46 · Henrique Dubugras, Jack Zhang
[00:54:46] S0: And why did you move to Hong Kong? [00:54:48] S1: This is after I raised the $3,000,000 so $1,000,000 from Lucy and $2,000,000 from the Citi investor called Gobi Partners. And they are Hong Kong based VC. And they basically told us, you know, that the opportunity in China is quite big. There's a lot of companies exporting from China and doing e commerce, maybe there's opportunities there. You guys should check it out. And that's kind of how we were sort of moving to Hong Kong because the company also failed the first prototype, which is a peer to peer... [00:55:21] S0: But did you actually build it or just We models [00:55:23] S1: built the core algorithm and we do the simulation, and we just realized the simulation... From the simulation result, we realized the algorithm was never going work. So we have to do something new. [00:55:34] S0: But did you spend any of the money at that point or very little? [00:55:37] S1: We spent probably a quarter of the money. [00:55:40] S0: Oh, wow. [00:55:41] S1: Yeah. And And [00:55:42] S0: then at this point, you're saying you're raising the money. You kinda knew it was not working, but, like, you know, let's just keep going.
00:55:42 · Henrique Dubugras, Jack Zhang
[00:55:42] S0: then at this point, you're saying you're raising the money. You kinda knew it was not working, but, like, you know, let's just keep going. [00:55:46] S1: Yeah. We kinda know it's don't... Doesn't work, but we still wanna raise money so that we can keep building the the new idea that gonna make it work. Yeah. So the second idea is, okay. So we're just gonna get interbank liquidity from a bank, then build, like, a few payment corridors and Australia and China being the first corridor, Australia and Hong Kong and Australia and China being the first corridor. We hope there's enough trading volume to kind of [00:56:10] S0: But what get us was to the customer product? Like, what were they seeing? [00:56:14] S1: So we built an invoicing product. Invoice. So basically, any merchant in Australia, they sell to China. And at that time, China's sort of middle class is booming. They're buying a lot of product from Australia, like cosmetic product, you know, house product and then honey and all that type, like milk powders. You know, a lot of people from Australia are selling e commerce product to China, and then we basically want to build an invoicing product to help the merchants in Australia to get paid. And that's also failed. We just couldn't get enough merchant because the SMBs are very less profitable. We don't have enough. At that time, we raised $3,000,000 We couldn't get product market fit at scale. There's just not enough people who want to get paid from Australia to China. [00:56:59] S0: Interesting. So the two first products, like, failed completely.
00:56:59 · Henrique Dubugras, Jack Zhang
[00:56:59] S0: Interesting. So the two first products, like, failed completely. [00:57:02] S1: But we're leveraging the second product to raise more money. [00:57:05] S0: Okay. [00:57:06] S1: So the fir... We're leveraging the first failed product to raise three. Yeah. And then we're leveraging the second failed product to raise from Sequoia and Tencent and Mastercard, I think, which is the turning point. [00:57:18] S0: Oh, interesting. So, you know, at this point, you're already raising, like, a series a from Sequoia, Tencent. And, like, I guess, why do you think they invested? [00:57:26] S1: I think because the vision I was talking about is building the largest money movement network in the world to completely displacing SWIFT. So the infrastructure vision is very big. Even though I was building a part, I don't even know whether it's gonna work or not, actually getting the volume. Because you can keep building infrastructure, but still, you need... Like, infrastructure is like the railways. You still need a train, you know, to carrying stuff on the on the rails to making money. Yeah. Right? So just at that time, we know it's a big idea to build a railway, but we just don't know what product you can carry on the train. [00:58:00] S0: And how do you meet Sequoia and [00:58:02] S1: all of them? Well, I'm the... A city investor of Gobi Partners knows Steven, who is a partner of Sequoia China, leaving Melbourne. So that's kind of a coincidence that he just happened to be leaving Melbourne, that's kind