Original Article Title: "Exclusive Interview with Airwallex Founder Jack Zhang: Tackling the Toughest Challenge at the Top of the European and American Markets"

Original Article Author: Xu Tan, Tencent Finance

Editor's Note: The last campsite on Mount Everest is the "Camp Four," at an altitude of 7950 meters, with the limit zone reaching 8000 meters. This metaphor reflects the extreme state many companies are currently in. The "Altitude 7950" column focuses on those who lead companies to cross the limit and reach the summit with perseverance. Their practices can solve the confusion and entanglement of many.

Is Airwallex's growth trajectory a grand narrative of reshaping the global financial system, testing the judgment of heavyweight investors who are heavily invested? In 2015, Airwallex founder Jack Zhang opened a coffee shop in Melbourne but discovered the pain point of cross-border payments due to international remittances—complex processes and high fees. Jack Zhang's philosophy is "as long as you find the pain point, you can create value." However, at that time, he had no product, only a vision. It was like holding a PPT, describing a vision of the future to make investors believe in the concept stage.

And his vision was: to reconstruct the global payment settlement system. This sounds too crazy. It means breaking down national barriers, technological barriers, and industry monopolies. Yibo Shao, a partner at Sequoia Capital China, hesitated and eventually withdrew his investment commitment. Indeed, which is the barrier and moat of the global financial network, algorithm, or license? Surpassing the SWIFT global settlement system that has been in existence for over 50 years, no one is certain.

The SWIFT settlement system, born in the 1970s, requires international remittances to pass through 5 to 6 banks, taking days and incurring high fees. Jack Zhang's idea of overturning this system was to "create a cloud-native global financial network." Finally, through technological breakthroughs, compliance strategies, etc., this was gradually implemented. By integrating directly with local clearing systems and bank card networks, Airwallex achieved direct access to global local clearing networks, significantly shortening the payment chain and improving payment efficiency, allowing business funds to smoothly reach their destination.

One key point is that financial licenses and regulatory capabilities are the passes for a financial technology company to conduct global business. Airwallex has obtained financial licenses in over 60 countries/regions, turning the vision of a global financial network into reality. Building on this foundation, Airwallex further expands its multi-currency matrix, embedded finance, and other end-to-end services. In just 2 minutes, companies can open accounts in over 70 countries/regions. This has made 150,000 globalized enterprises such as SHEIN, TikTok, JD.com, all customers of Airwallex.

For the past 10 years, both Airwallex and Jack Zhang have been like a high-speed racing chariot. In order to expand the business, Jack Zhang said, "I once visited 14 countries in 21 days." Airwallex has also grown rapidly to achieve an annual transaction volume of $130 billion, becoming a $6.2 billion fintech unicorn. Its lineup of investors is luxurious, including Tencent, Sequoia, Hillhouse, DST Global, Visa Ventures, and more.

Recently, the investment community has predicted that Airwallex will be the "next $100 billion valuation company." In a recent episode of the "Altitude 7950" program produced jointly by Tencent News and Tencent Consulting, Airwallex's Co-founder and CEO Jack Zhang was invited to talk about his ups and downs in the entrepreneurial journey, globalization, and more.

Below is a part of the dialogue between Tencent News and Jack Zhang:

1. Struggling in Australia in the Early Days

"Altitude 7950": In 2001, at the age of 16, you went to Melbourne, Australia, to attend high school and even worked to earn tuition fees by yourself. What was that experience like?

Jack Zhang: I remember that very clearly. I couldn't even afford a 50-cent chocolate bar back then. When I first arrived in Australia, my family situation was okay. However, after graduating from high school in Australia, there were some economic issues at home, and the financial support was not as good as before. I had already been accepted into university, but I had to work to survive. I used to wake up at 4:50 or 5 a.m. every morning to catch the earliest train, take a one-and-a-half-hour train ride, transfer to a bus at 7:30, travel for over half an hour on the bus, then walk for about twenty to thirty minutes on a mountain road to a lemon factory in Lilydale, a suburb of Melbourne, to carry lemons box by box. I worked 10 to 12 hours a day. The temperature was also high; basically, it was 38 to 40 degrees Celsius every day.

"Altitude 7950": Why was the temperature so high?

Jack Zhang: Because Australia's summer season is from December to March, which is the hottest time of the year in Australia, and the lemon factory is located on a mountain. So, the temperature has always been quite high.

"Altitude 7950": How much could you earn in a day?

Jack Zhang: The pay was better, because when you worked at a restaurant, you might only make $10 to $12 per hour. At a lemon factory, it was $15 per hour, and it was paid in cash. But it was not sustainable. After going to college, I worked at a bar from 4 pm to 11:30 pm, then from midnight to 8 am. Or at a gas station, working almost 16 hours a day, which was quite hard.

《Altitude 7950》: Do you think this experience had any impact on shaping your personality?

Jack Zhang: This experience probably shaped some resilience in my character for future entrepreneurship. Life always has its ups and downs anyway.

《Altitude 7950》: You were accepted into the University of Melbourne to study computer science. You worked as a software engineer at the National Australia Bank (NAB). Was this experience crucial for founding Airwallex?

Jack Zhang: Yes. Actually, my first job had a significant impact on me. When I had just graduated, I worked in the investment department of an insurance company in the UK. At that time, everyone on my team had some particularly strong expertise. My boss at the time was not at all from a mechanical engineering background, but he built a 37-meter-long sailboat from scratch over 7 years, learning everything himself. Later, he even lived on this boat for two years and sailed across the ocean from Australia to Indonesia.

My other colleagues were all cycling enthusiasts, riding their bikes to work every day at an average speed of over 50 kilometers per hour, reaching an amateur competitive level. This influence on me was quite significant. You may not understand something, but you can learn from 0 to 1, create something, which is very encouraging. As long as you have passion, you can do it. But this was just the beginning. Later, I did many different small businesses, whether it was import-export, real estate development, opening a coffee shop; the money I made from side businesses may have been 10 to 20 times more than my main job. But I never left my main job—writing foreign exchange trading software in the bank and risk management transaction software, allowing myself to stay in touch with the latest technology.

《Altitude 7950》: You have always been engaging in side businesses or constantly seeking new opportunities, as if deep down you are not prepared to lead a comfortable and stable life?

Jack Zhang: Yeah, I remember when I told my parents that I was going to resign from National Australia Bank, they both thought I was crazy. Because they thought it was a very good job, very stable, and the salary was good. Why would I resign? When I was 14 years old, I saw my good friend being hit and killed in an accident right next to me. We were riding bicycles together, and he was hit and thrown aside. I thought his leg was broken, but the next morning at 7 o'clock when I went to the hospital to console him, he was no longer there. That kind of impact makes you feel that life is actually a matter of minutes, you never know when you will die, so you must live in the moment and maximize your life experiences.

The second thing, I had just turned 30 and had a daughter. When I witnessed her birth, I felt that life is a wonderful thing, but it seemed like I hadn't done anything to make her proud. Although I had made a lot of money, I didn't change anything, nor did I contribute to social progress. Every day was just looking at the screen and trading.

So at the age of 30, I was still not satisfied and wanted to continue trying. Coincidentally, I had two co-founders who were doing similar things. My CTO partner, Xijin Dai, had failed in entrepreneurship 5 times. He was on the verge of joining Ele.me as their CTO, almost became one of the first 5 employees of Musical.ly, but in the end, he didn't go to either and chose to start his own business. Even though each of his previous ventures had failed, he still wanted to continue entrepreneurship. My other partner Max, who is in product design, has always been involved in various businesses with me. We did real estate together, we ran a coffee shop together. Although his original profession is an architect, what he later worked on had little to do with his architecture and he has always been trying different things.

《Elevation 7950》: I have a curiosity, your CTO sounds very impressive, especially in the field of technology, they are all very adventurous young people. What made them choose to work with you, and why are you the CEO?

Jack Zhang: First of all, I came up with this idea, and they may feel that I have a relatively high business acumen. Later, the company went through three or four near-death moments, miraculously surviving each time. They may feel that no matter what happens, the most difficult tasks always fall on me. I always handle the toughest challenges, while their lives remain a bit more comfortable, haha.

2. As Long as You Find the Pain Points, You Can Create Value

《Elevation 7950》: Actually, the most important thing in establishing Airwallex came from you discovering many pain points while running a coffee shop, right?

Jack Zhang: Yes, because my partner's English name is Max Li, which is the same as a name on an OFACT Blacklist. So, every time he makes a personal remittance, he is often intercepted by the correspondent bank network. Every intermediary bank charges a fee, making the remittance process slower and resulting in a very poor experience. At that time, I thought, why do we need an intermediary bank network for remittance? Why can't we directly connect to each country's local clearing system globally, turning it into a cloud-like clearing network where everything is settled on a peer-to-peer basis.

When I was working at a bank, I realized that they had accumulated a lot of technical debt over the past few decades, making it difficult to innovate. Second, I questioned whether the market was large enough. Originally, this was a multi-trillion-dollar market, which was significant. So, what I needed to do was to ensure that I was strong enough, understand how to outperform others in the market, and with what products.

《Elevation 7950》: How did you design a product to surpass the SWIFT system?

Jack Zhang: We built a completely new system. First, we established a global financial service infrastructure, which is our core advantage. We directly integrate with local payment systems instead of relying on slow and expensive third-party networks or other partners. This allows us to achieve faster transaction speeds, lower costs, and stronger global fund control. Currently, our API platform helps businesses easily complete global payments, fund management, foreign exchange, and multi-currency account operations, avoiding the manual inefficiencies of traditional banks. Furthermore, in terms of regulation, we have accumulated a wealth of knowledge about regulatory frameworks and understand the onboarding processes of various jurisdictions globally, ensuring that companies comply with local laws and regulations as they expand their global business.

《Elevation 7950》: When you first started looking for investors, you must have had many experiences of rejection. How did you convince them at that time?

Jack Zhang: When we first started our startup to raise funds, we spoke with some VCs in Australia and China. Basically, all VCs in Australia rejected me. A Chinese VC called JVP had already given me a term sheet, and we had both signed it. Then, Yao Bo (JVP China Partner) suddenly said he wanted to give me a call. After the call, he said they were no longer investing.

《Elevation 7950》: Why?

Jack Zhang: At that time, I talked a lot about some algorithms related to foreign exchange trading. He felt that the algorithm itself was not a competitive barrier, which was indeed true. However, I think that at that time, as a newly established startup, we didn't think very clearly about how to solve this problem. I don't believe that a founder can think so clearly about all these things at such an early stage, still in the PowerPoint stage.

《Elevation 7950》: You didn't have a product, only a vision. Convincing investors of this was indeed a challenge.

Jack Zhang: We also spent a lot of time talking to Sequoia China, Tencent, and Mastercard. There were many twists and turns in between, and then I flew to Tencent's headquarters in Shenzhen to chat with James (Tencent's Chief Strategy Officer). James felt that what we were doing was more suitable for a foreign entrepreneur to do, and then convinced Pony (Tencent's founder, Pony Ma). Sequoia always said, "As long as Tencent invests, we will invest." So, we started fundraising in September 2017, and by the time we closed (the following year) in March, we only had a little over two weeks' worth of money left in the bank. The company was on the brink of death.

《Elevation 7950》: Did you have any internal obstacles when persuading a top investor?

Jack Zhang: There weren't really any obstacles, sometimes I felt that the moment was quite crucial. For example, when we went to see James (Tencent's Chief Strategy Officer) at the Tencent headquarters building, I distinctly remember it was January 5th, 2017. I can recall every question he asked me in that 30 minutes. Because there are some moments in life that are very important. In any case, there were still opportunities through these communications. Each investor's sensitivity to this business is also different. Yuri Milner (DST founder) asked more profound questions, such as how I grew up, what my parents did, all related to my personality. He didn't ask anything related to the business.

《Elevation 7950》: Your current competitor, Stripe, offered to acquire you for $1.15 billion in 2018? That was when Airwallex was on the brink of death.

Jack Zhang: Yes, on the brink of death. At that time, Stripe's founder, Patrick, specifically flew to Shanghai to talk to us. I verbally agreed, they also sent a term sheet, it was a very good offer. I could immediately get several billion dollars in cash and 1% to 2% of Stripe's stock. I stayed in San Francisco for two weeks to think about this. I felt that I had only been in entrepreneurship for a little over three years, and had not truly experienced the joy of entrepreneurship. I would have to work at Stripe as an employee for five years. At that time, I was 33 years old. Five years later, I would be 38, and I wouldn't have the time and energy to start another company. That means my entrepreneurial journey in this life would basically come to an end.

Moreover, for me, whether I earn or lose billions of dollars, it is of no help to humanity. In the end, it's just a P&L (Profit and Loss), which is a zero-sum game. I can only say that I am smarter than others, but I cannot say that I have made any contribution to society as a whole. That's why I still want to start a business.

《Elevation 7950》: So entrepreneurship is not money-driven, but vision-driven?

Jack Zhang: It's about doing something that gives you a higher sense of fulfillment in your short few decades of life, so that you don't regret it when you are old.

《Elevation 7950》: Your first angel investment was made by Lucy Liu, and it is rumored that she became the richest woman in New Zealand because of it. Can you tell us the story of that time?

Jack Zhang: In 2015, after work, I went to the cafe I started to do some entrepreneurship. It was at this time that I met a girl who was Max's friend, Lucy Liu. While having dinner, I told her that I didn't want to continue with this cafe and wanted to resign to build a platform like Airwallex. Due to her many years of experience in the finance industry and sharp investment sense, she said she could invest $2 million, taking a 40% stake. I was quite surprised because rarely does someone offer you this kind of deal at the first meeting, and she seemed quite serious at the time. The next day, we went to the Law School of the University of Melbourne at 8 a.m. because she was also from the University of Melbourne. We chatted until about 11 a.m., and basically, she agreed to invest $1 million, taking a 20% stake in the company, which was originally the money she planned to use to buy a house.

What's even more dramatic is that on Monday, we hadn't drafted any documents, and I received a text saying that $1 million had been transferred to my account. I thought this was one of the most successful investments in the world. It's not easy for a young girl in her twenties to have this kind of courage. I asked her why she believed in us, and she said she believed in herself.

III. Experience and Lessons Learned in Global Development

《Elevation 7950》: Many Chinese entrepreneurs are now going global. What underestimated ability do they have?

Jack Zhang: Chinese people may have the strongest execution capability in the world, as well as a spirit of hard work and endurance. Shen Nanpeng once said, "I don't invest in Chinese companies; I invest in Chinese entrepreneurs." He said Chinese entrepreneurs are not like trees that stop growing once they reach a certain height; he said Chinese entrepreneurs are like 'animals' that can migrate based on changes in the environment worldwide. I think many Chinese entrepreneurs, if they do not have language barriers, can actually succeed anywhere in the world, and many good founders of American companies are also Chinese.

《Altitude 7950》: For Chinese companies going global, the pitfalls you have experienced are particularly valuable for them to learn from. I remember you said that every entry into a new country is like starting a new business. Does this mean having to experience multiple failures?

Jack Zhang: Yes, for example, in the UK market, we encountered significant issues in the product's integration with the local market. We did not cater to many local user habits. For instance, in the UK accounting system, many use Xero, Sage, and NetSuite. During local settlements, they not only use BACS (Bankers' Automated Clearing Services) but also CHAPS and Fast Payment. You need to support all their scenarios, meaning you have to fully support all their local clearing systems to meet the transaction needs of businesses. This required a great deal of time and effort.

In addition, expanding into the local market requires a very rigorous customer acquisition process. We only focused on three industries: e-commerce, technology, and tourism. Through BD (Business Development), we first acquired the top 1000 customers, targeting some well-known companies with influence in these industries. Once we onboarded these customers, we had a market foundation to begin online and channel investments. These were lessons learned from many failures. In the UK, we failed the first and second times before succeeding on the third attempt. The same goes for Australia, where we also succeeded on the third try.

《Altitude 7950》: What were the main reasons you identified for the early failures in overseas markets?

Jack Zhang: People, product-market fit, and some incorrect approaches to BD market expansion. We needed to focus on making customers in these niche sectors really love our product and be willing to recommend it. Initially, we hired the wrong people, wasting over a year.

《Altitude 7950》: What are some of the mistakes you have made in your decisions?

Jack Zhang: There have been quite a few, especially in the area of hiring. We made many mistakes in this aspect. Particularly early on, we tended to trust experience and sought individuals with financial and banking experience, those who had held executive positions in banks. Almost all of these executive hires failed, so we had to swiftly correct this.

《Elevation 7950》: When do you see a signal and tell yourself to quickly correct it?

Jack Zhang: For example, when a senior executive is talking about something that is very contrary to your company's values. For instance, if they focus on their title rather than what contribution they can make to the company. Another example is that all our company's executives must first be an IC (Individual Contributor). For example, I am a product manager, even if one day this company is no more, I can still be the best product manager in the world and apply for a job. This is your IC capability. I require every executive to have a strong IC capability. Because many executives, after many years in a management position, become someone who manages people, forgetting what their core professional ability really is.

《Elevation 7950》: That's how bureaucracy starts.

Jack Zhang: Bureaucracy is very easy to spread, and later we found that those who were successful were those who had no experience at all. In our hiring process, we only look at three things. First, why did you join us, what is your motivation, just changing jobs, getting a raise and a promotion, or truly wanting to join us, believing in our vision. The second is whether you have the most basic problem-solving ability. This problem-solving ability may not necessarily come from experience; sometimes, you can approach a problem in a completely unfamiliar field with an engineer's mindset. The third is, we look at your raw intelligence, which also determines whether you have curiosity, whether you, when faced with a problem, will ask the right questions, discover and solve the problem, and engage in deep thinking.

《Elevation 7950》: How do you assess his problem-solving skills before he joins?

Jack Zhang: Ask about some of his past experiences, ask what he thinks the most difficult problem he has solved is. Ask some questions on the spot. For example, do you know how GPS works? Most people basically don't know how GPS works. But through this question, observing the other person's reaction will surprise you. When you see many job applicants, their first reaction to hearing a question they have never heard before is, why are you asking me this question, I refuse to answer you, I have such good experience, why should I answer this question, then this is a very negative trait, indicating that when faced with difficulties, their first reaction is not to enthusiastically embrace the problem, think of a solution, but to say, this has nothing to do with me, is a very denial state. From how a person answers questions, you can also see whether they are suitable for a startup and a tech company.

《Elevation 7950》: A startup will encounter many difficulties, but what is needed is some people who embrace these difficulties.

Jack Zhang: I prefer people who engage in deep thinking, and I particularly like people who think from first principles. I consider myself a perfectionist. For example, in a long article with 12-point font size, I can instantly spot the font size being 11. I pay great attention to these details. Also, I have a bit of OCD. If something is not done, I must complete it. My home is spotless; for instance, if someone moves my toothbrush even slightly, I immediately notice that it has been moved. So, one time when something was stolen, I immediately knew because I saw that my wallet's position was different. The good aspect of this personality is that you want to do things perfectly. The downside is that you may focus too much attention on certain details.

IV. Tackling the Toughest Challenges in the European and American Markets

《Elevation 7950》: The U.S. and Europe are crucial markets for you, but when you first entered the European and American markets, you did not have brand awareness, and you faced strong competitors. How did you conquer this market? What challenges did you face?

Jack Zhang: We tackled the most difficult aspects at the top level. Firstly, our product had to be competitive enough to ensure that our costs, efficiency, and user experience could be the best. Secondly, the team was completely localized, with local recruitment and locals handling local affairs. Thirdly, we tried to use our customers to help us build our brand because we are a platform that exists globally for entrepreneurs. We still hope to use more of our customers and more entrepreneurs' stories to impress more users.

Ultimately, when a customer decides to buy a product, there is something emotional beyond rationality. Therefore, when we are marketing, we not only consider the functionality, efficiency, and user experience of our products but also think about the emotional impact our brand has on users.

《Elevation 7950》: For the European and American markets, are there any established patterns that Chinese companies seeking globalization can learn from?

Jack Zhang: The European and American markets place a strong emphasis on branding, especially in finance and B2B, where high levels of trust are required. By the end of 2023, we sponsored the McLaren F1 team. Our brand's awareness increased by nearly 60% within six months, making it a fairly effective way. Essentially, we leveraged the McLaren brand alongside our own to enhance the brand effect and rapidly increase awareness and trust.

《Altitude 7950》: You started your business in Melbourne in 2015 and achieved complete globalization by 2023. For Chinese companies looking to expand internationally, should they first focus on limited globalization or go straight for complete globalization?

Jack Zhang: I think it depends on the nature of your company. For example, Toutiao is perhaps the best example of a globally expanding Chinese company because it is a B2C product. Therefore, it can rely on a highly centralized R&D and marketing team to quickly execute globalization. After reaching a certain level of globalization, they can then start hiring local teams. On the other hand, B2B companies may need to pursue complete globalization earlier, especially in geopolitically complex situations, to plan ahead.

《Altitude 7950》: In 2018, your company was already a leader in Asia. Why did you make the decision in 2023 to pursue complete globalization, which is a more challenging endeavor?

Jack Zhang: There wasn't a specific decision point. Beginning in 2018, we first targeted markets in Australia, Hong Kong, Mainland China, and the U.S. Then we expanded to the UK, Europe, Singapore, Canada, Japan, South Korea, followed by South America and the Middle East. Essentially, we aimed to distribute our business according to global GDP rankings.

《Altitude 7950》: You recently completed a $300 million Series F funding round, reaching a valuation of $6.2 billion. Over the past few years, you have raised $1 billion in funding. What do investors see as your key differentiators and moats?

Jack Zhang: The company indeed burns a lot of cash, with an annual expenditure of over $150 million. What we didn't anticipate is that not only did we maintain over 100% growth in 2022 and 2023, but our business quickly turned profitable. Why did we recently raise more funding? It's because we see a tremendous opportunity in AI. AI has spawned numerous new businesses, logics, and products worldwide, and we aim to leverage this by developing our own large financial model. We hope to fully automate our company's global financial management and introduce an Agentic AI product to handle customer reconciliations, financial compliance, and financial analysis.

《Elevation 7950》: Just now you mentioned tariffs, what do you see as the opportunity?

Jack Zhang: We have been strategizing on this matter for a long time. We have acquired local payment licenses in Mexico, Brazil, Indonesia, and Vietnam, and have had our own payment products for a long time. We can open a bank account for users in 70 countries globally in just two minutes, whereas the same process at Citibank or HSBC might take several months. So, whether it's technology, user experience, or infrastructure, we are far ahead of those global banks from the previous era. This kind of global technological revolution driven by AI, and this fundamental re-creation of productivity, is far greater than the impact that geopolitics can have on human society. Even in the case of a "tariff" (dispute), its impact on society is limited, while the impact of AI and the Internet on humanity will last for decades to centuries, creating new productivity from the very bottom of the human economic model and fundamentally changing the economic model of human society.

《Elevation 7950》: What I'm curious about is, with all your various endeavors and experiments, what has brought you this kind of trait?

Jack Zhang: I grew up in a small county, in the countryside, quite freestyle, just fishing around when there was nothing else to do. And I was raised by my grandparents; they spoiled me a bit, letting me do whatever I wanted, without much constraint. Later, when I moved to the city, I experienced some unfair treatment, like being told my rural accent was strange, and so on. I have been to many different cities, and every time I go somewhere, there is some regional prejudice, which may have been somewhat helpful.

《Elevation 7950》: So, is it not harm but help?

Jack Zhang: After experiencing harm, you feel like you've been through something extraordinary, isn't that help?

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