01:08:20 · Henrique Dubugras, Jack Zhang
[01:08:20] S0: So tell me about it. Like, you got the offer. How was the process even to get the offer? [01:08:24] S1: The process was quite straightforward. So we, you know, they invited us to San Francisco with my entire co founder and leadership team. We spent like a week there. I spent a lot of personal time with Patrick and Marco Mars. And later on that day, I went to Melbourne to do like a whole week of due diligence. I actually started Patrick visiting Shanghai. So I actually met Patrick the first time in Shanghai, and he met me and my co founder, Jay Cobb, and he really liked us. And then we traveled to San Francisco. Then they did DD in Melbourne. Then he also invited me to Singapore to spend a lot of time with him personally. He was traveling there. Then he invited me again to San Francisco. And that's when he made the offer on the term sheet. And Will is the guy who negotiated the term sheet with us. [01:09:16] S0: And did your investors think you should sell? [01:09:19] S1: Sequoia didn't think Sequoia China didn't think I should sell because the business was growing very fast. And I think the main reason they didn't want to sell is not because of the business, because they're getting the $800,000,000 And they only just invested it at $450,000,000 like a few months ago. So it [01:09:38] S0: was going be just 2x [01:09:39] S1: kind thing. It's like a two x is not a big thing, you know? [01:09:41] S0: Yeah. Yeah. Yeah. So they didn't think you're gonna sell. What about Tencent and other investors? [01:09:47] S1: Tencent basically saying it's kind of up to you.
01:09:47 · Jack Zhang, Henrique Dubugras
[01:09:47] S1: Tencent basically saying it's kind of up to you. [01:09:50] S0: What about Lucy? [01:09:52] S1: Lucy didn't want to sell because, you know She likes the job. She likes the job. [01:09:56] S0: So no one wanted to sell, really? [01:09:59] S1: Max actually said he wanted to sell, but, you know, he's not the core sort of decision maker in in the founding team. And my CTO didn't really want to sell because he's not the most sort of commercial savage co founder, right? He's a technologist. And he just feel that we're still very young as a startup. [01:10:22] S0: Wow. And so you said no in the end? [01:10:25] S1: Yeah, after two weeks. Was [01:10:28] S0: Was it a hard decision? [01:10:29] S1: Very hard. I basically couldn't sleep well for two weeks just walking around the San Francisco Park on the street for two weeks. Didn't work that much. And then I flied back to Melbourne. I made my decision when I actually got to Melbourne. I was like, okay, number one, that I don't know if I'm gonna be able to fully invest the five years in Stripe. I don't know if I'm gonna last that long. Number two, that there's so much happening in this company that I wanna see through. [01:10:59] S0: Looking back, was it the right decision? [01:11:02] S1: Knowing how hard it's gonna be for the sort of next five, six years, I probably think is not the right decision. But since we have already kind of gone through this tough period, know, it's probably the right
01:11:02 · Jack Zhang, Henrique Dubugras
[01:11:02] S1: Knowing how hard it's gonna be for the sort of next five, six years, I probably think is not the right decision. But since we have already kind of gone through this tough period, know, it's probably the right [01:11:15] S0: Like, if you knew how hard it was gonna be, yeah, maybe not. But, you know, now you've already been through it, you know, now it's great. Yeah. I think that's true for, like, you know, a lot of entrepreneurship. Right? Like, if you just knew how hard it was gonna be, you know, you probably wouldn't have done it, but the ignorance is a bliss in a lot of times like that. No. You know, Airwallex now is worth way over 5,000,000,000 and, you know, obviously was... Will also be a great financial outcome for everyone. So... Okay. So you got this acquisition offer really early on and said no. And at this point, the business was APIs for large merchants to move money around in APAC? Around the world. Around the world. [01:11:53] S1: Yeah. I mean, 50% of the money movement is still in The US and Europe. Okay. Yeah. [01:11:58] S0: Got it. Got it. So... And then you had this issue of China, and you're like, okay, I need to build a real global business because, like, I can't... This is too volatile. [01:12:05] S1: Yeah. You know, at that time, 90% is Hong Kong China. You know, fast forward into today, Hong Kong, China is less than 50%, and China is less than 5% of our business. [01:12:16] S0: Makes sense. And what were the main customers at this point? Like, what were the
01:12:16 · Henrique Dubugras, Jack Zhang
[01:12:16] S0: Makes sense. And what were the main customers at this point? Like, what were the [01:12:19] S1: We also kind of started with sort of the API for large enterprise or platforms. But in 2019, we started building this SMB product, which is kind of a software and infrastructure layer on top of our own money movement rails. Then we started building kind of card issuing as well and also started building payments, which started competing with Stripe. And that payments and issuing business went from zero in 2019 to now more than 50% of our gross profit in 'twenty four, and more than 60, 70% of our revenue. And the SMB business used to be like less than 5% of our business and now become 80% of our business. [01:13:02] S0: So you went from having this API business for platforms to now having like direct relationships Yes. With the Wow. That's so interesting. So tell us about the the funding. So you you raised this money from Square four fifty, so you kept raising money. Like, what was the history of fundraising in the company?
01:13:02 · Henrique Dubugras, Jack Zhang
[01:13:02] S0: So you went from having this API business for platforms to now having like direct relationships Yes. With the Wow. That's so interesting. So tell us about the the funding. So you you raised this money from Square four fifty, so you kept raising money. Like, what was the history of fundraising in the company? [01:13:18] S1: We leveraged the Strap acquisition offer to raise money from DST at $1,100,000,000 in end of twenty eighteen. We got a lot of term sheet at the time because people was like, Oh, who is this company that Strap tried to buy? Goldman gave us term sheet and Hugh Hust gave us term sheet. Eventually, picked up DST because we're already thinking about going global, so we want to have a global fund leading our round. And the next one is sort of HelloSophia led the next round at 1.7. Then, Green Oaks led another round at 2.6. Then, Lone Pine led another round at $4,000,000,000 and 5.5. So we kind of overall now raised about $1,000,000,000 now. [01:14:02] S0: So where are your employees at this point? [01:14:05] S1: My employee was in Melbourne and Shanghai to get started, but now really spread around the world, right? So about 200 people in UK, Europe, 200 something in Singapore, 300 in Australia, 150 in The US, 100 something in Hong Kong. So it really sort of spread around. [01:14:25] S0: So I'm curious, like, what was the experience like managing people? Like, what's the cultural differences between US, UK, Australia, China? Like, how is managing... You know, what's different about hiring and managing people in these different geographies?
01:14:25 · Henrique Dubugras, Jack Zhang
[01:14:25] S0: So I'm curious, like, what was the experience like managing people? Like, what's the cultural differences between US, UK, Australia, China? Like, how is managing... You know, what's different about hiring and managing people in these different geographies? [01:14:38] S1: Yeah. The biggest sort of conflict is coming from Australia and China, right, because Australia is is quite a relaxed country and where China is very intense, and that's kind of, you know, Shanghai and Melbourne was where we started the business. It's very kind of high contrast in terms of the intensity we're operating and some of the mindset we're operating. [01:14:57] S0: How does it manifest, you know, day to day? [01:15:00] S1: It was very challenging. There's a lot of firefighting. There's a lot of culture crash, and there's a lot of stuff turned over. It's... I was used to joke to my friend, and I was really scared of getting a long haul flight because every time I get off the plane, there's like three people telling me they're resigning. Yeah, culture was a real, real issue for the first six, seven years of building the business, just a huge amount of turnover. [01:15:30] S0: But like, why did the turnover happen? Is it because they... [01:15:34] S1: We have a very high sort of requirement on work intensity, and then we just couldn't get the workforce in Australia working the intensity we wanted. [01:15:44] S0: So what did you do?