Why Airwallex Is Betting Against SWIFT and Stripe | CEO Jack Zhang
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this compelling episode of HD in HD, host Henrique Dubugras sits down with Jack Zhang, co-founder and CEO of Airwallex, to explore his remarkable journey from a small Chinese city to building one of Australia's biggest tech success stories. Jack shares his transformative path from arriving in Melbourne at 15 with no English and no money to turning down a billion-dollar acquisition offer from Stripe. (00:37) The conversation covers Airwallex's evolution from multiple failed product attempts to becoming a $100 billion payment volume business, while Jack reflects on the cultural challenges of building a global workforce and the personal cost of extreme entrepreneurial dedication.
- Core themes include immigrant entrepreneurship, the power of resilience through failure, cultural adaptation in global business building, and finding balance between extreme work ethic and sustainable leadership
Speakers
Jack Zhang
Jack Zhang is the co-founder and CEO of Airwallex, a global fintech platform processing over $100 billion in payment volume annually. Born in a small Chinese city, he moved to Australia at 15 with no English, worked multiple jobs to fund his education, and became an algorithmic trader before founding Airwallex in 2015. The company has raised over $1 billion in funding from investors including Sequoia, Tencent, and Mastercard, and Zhang famously turned down a $1.2 billion acquisition offer from Stripe in 2018.
Henrique Dubugras
Henrique Dubugras is the co-founder and CEO of Brex, a financial services company for startups and growing businesses. Born in Brazil, he moved to the US as a teenager and co-founded Brex while still a student at Stanford University. He hosts the "HD in HD" podcast, where he interviews successful entrepreneurs about their journeys building global businesses.
Key Takeaways
Embrace Failure as a Path to Product-Market Fit
Jack's journey with Airwallex involved two complete product failures before finding success. (53:36) The first was a peer-to-peer foreign exchange matching algorithm that failed in simulation, and the second was an invoicing product that couldn't achieve scale. Only their third attempt—an API-based mass payout product for large enterprises—took off, growing from zero to $1 billion in volume within a year. This demonstrates that persistence through failure, rather than perfect initial execution, often leads to breakthrough success. The key is maintaining enough runway and team morale to iterate until you find what works.
Leverage Cultural Strengths Rather Than Imposing Culture
Zhang learned the hard way that trying to impose Chinese work intensity on Australian employees created massive turnover and cultural conflict. (75:40) His solution was to restructure operations to leverage each culture's strengths: Chinese teams focused on infrastructure and execution, while Australian teams handled software development where they excelled. This approach requires understanding that sustainable global operations come from adapting to local strengths rather than forcing a one-size-fits-all culture across different markets.
Vision Scale Matters More Than Current Metrics for Major Investors
When raising from Sequoia and Tencent, Jack's pitch focused on "building the largest money movement network in the world to completely displace SWIFT" rather than current revenue figures. (57:33) He explicitly told investors they were building "railways" without knowing what "products would travel on the rails." This infrastructure-first vision resonated with top-tier VCs even when the company had no clear product-market fit, showing that articulating massive market opportunities can trump immediate traction for visionary investors.
Financial Security Enables Better Long-term Decision Making
Jack's decision to turn down Stripe's $1.2 billion acquisition offer was partially enabled by his existing wealth from real estate investments. (66:42) Having made millions from property development while working as a trader gave him the financial cushion to take entrepreneurial risks and make decisions based on long-term vision rather than immediate financial need. This highlights how building alternative income streams or wealth before starting a company provides crucial decision-making freedom.
Extreme Work Intensity Has Diminishing Returns Over Time
Zhang worked 110-120 hours per week for nearly eight years, ultimately leading to anxiety issues and burnout. (88:52) He now advocates for a more sustainable 70-80 hour work week, emphasizing that building a business "for a decade and beyond" requires investing in personal relationships, health, and balance. This transition from sprint mentality to marathon thinking is essential for leaders who want to remain effective over the long haul of building generational companies.
Statistics & Facts
- Airwallex processes over $100 billion in payment volume annually and has surpassed $500 million in ARR, with over 1,600 employees across 23 offices globally. (01:58) This demonstrates the massive scale the company has achieved since its founding in 2015.
- Jack leveraged up to 95% to purchase real estate investments, borrowing over $10 million from banks while earning around $250,000 as a bank employee. (32:59) This extreme leverage strategy helped him build wealth that later provided financial security for entrepreneurship.
- The company grew from zero to $1 billion in payment volume within a single year (2018), representing 100x growth, while generating $2.2 million in revenue that year. (65:05) This explosive growth attracted Stripe's attention and billion-dollar acquisition offer.
