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?
01:15:44 · Henrique Dubugras, Jack Zhang
[01:15:44] S0: So what did you do? [01:15:46] S1: We eventually just realized that is the wrong strategy to try to build a sort of Chinese way of working in Australia just doesn't work. You basically have to look at what the Australian workforce are good at and try to leverage their strengths rather than their weakness. [01:16:02] S0: So what does the Australian workforce go at? [01:16:03] S1: They're good at building software. So we end up putting all these 100 engineers in Australia building on a software product rather than the infrastructure product. [01:16:11] S0: And then China built the infrastructure. [01:16:13] S1: Yeah. Then we later on sort of expanded that infrastructure team to Singapore and and Netherlands as well. [01:16:19] S0: Oh, wow. In the beginning, you had this thing around the motivation, you know, was, hey. I wanna get my daughter to be proud. Right? How do you think the motivation kind of evolved over these different stages of the company?
01:16:19 · Henrique Dubugras, Jack Zhang
[01:16:19] S0: Oh, wow. In the beginning, you had this thing around the motivation, you know, was, hey. I wanna get my daughter to be proud. Right? How do you think the motivation kind of evolved over these different stages of the company? [01:16:34] S1: I think the early days was was so hard because I built this business at Australia, which have no mental... No one tell me how to build a start up. I have this culture clash between China and Australia workforce. Just nothing really worked. Things always broken down. I have to fix it. Just so difficult. Kind of later on, it's almost become like the early employees have put so much blood and sweat into this company, I just cannot let them down, right? The investors, we raised, failed two part out. The investors still believe in me to give me money to towards this vision of the best money movement and payments financial platform in the world, I really need to deliver for them. So a lot of this obligation become my motivation. [01:17:27] S0: And how did the money aspect play into it, like, over the years? You know, like, did you feel motivated by it, not motivated by it? You know, obviously made money along the way. Like, did all... How do you think about that? [01:17:39] S1: The money wasn't really a motivation factor until I met you. [01:17:46] S0: Tell tell me more. So, like, you think that, like, until you just didn't care about it for the longest time? [01:17:50] S1: Yeah. I mean, I always had enough money, and I didn't... I live in a very sort of simple and basic life and until 2022.