20VC: The Most Insane Story in Startups: Airwallex: The Angel That Turned $1M into $1BN | The Fund That Pulled a Term Sheet & Lost $1BN | Rejecting Stripe's $1.2BN Offer | Scaling to $1BN in Revenue & 100% YoY Growth for 8 Years with Jack Zhang
🎯 Summary
20VC Podcast Summary: Airwallex - The Insane Startup Story with Jack Zhang
This episode features an in-depth conversation with Jack Zhang, Co-founder and CEO of Airwallex, one of the world’s fastest-growing global payments and financial infrastructure companies. The discussion traces Zhang’s extraordinary journey from extreme financial hardship in his youth to building a company that achieved $1BN in revenue while maintaining 100% year-over-year growth for eight consecutive years.
1. Focus Area
The primary focus is on Global Fintech Infrastructure and Hyper-Scaling. Key themes include: overcoming early-life adversity, the importance of resilience, the evolution of cross-border payments (specifically critiquing the SWIFT system), the strategic decision-making behind massive funding rounds and acquisition rejections, and the operational philosophy of aggressive, non-budgeted scaling.
2. Key Technical Insights
- Critique of SWIFT: Zhang detailed the fundamental flaws of the 1970s SWIFT system, highlighting its reliance on numerous intermediaries, high fees, slow settlement times (taking months for cross-border transfers), and limited data capacity (140 characters per message), which leads to high false positive rates.
- Airwallex’s Infrastructure Philosophy: The initial concept for Airwallex was to move beyond the intermediary model, aiming to treat money movement like real-time data transfer over the internet, leveraging technology to create a fundamentally new system for global transactions.
- Early Product Pivots: The team initially considered building a Square-like POS system supporting NFC payments but ultimately pivoted due to internal debate (NFC vs. QR codes) and a critical real-world pain point encountered during their import/export side hustles: the broken international payments infrastructure.
3. Market/Investment Angle
- Aggressive Scaling Philosophy: Zhang explicitly stated he doesn’t believe in strict budgeting (“I don’t have a budget. I’m just higher as fast as possible, blow the dollar”), operating under the belief that rapid scaling and securing capital frequently were necessary to outpace competitors in the infrastructure space.
- Valuation Milestones & Rejections: The narrative highlighted several high-stakes moments, including rejecting a $1.2BN acquisition offer from Stripe when Airwallex only had $2M in revenue, and the dramatic story of a renowned global VC firm pulling a term sheet, costing them a potential billion-dollar gain.
- Hyper-Growth Metrics: The company achieved $1BN in transaction volume within nine months of launch and sustained 100% YoY growth from 2015 to 2023, reaching $700M in ARR by early 2024.
4. Notable Companies/People
- Jack Zhang (Co-founder & CEO, Airwallex): The central figure, whose background includes working as an algorithmic trader, running numerous side businesses (import/export, real estate, coffee shops), and demonstrating extreme resilience forged by early financial insecurity.
- Airwallex Co-founders: Mentioned Jacob (CTO) and Max Lee (Head of Product Design), who were instrumental in the technical debates and early business ventures.
- Stripe: Mentioned as the potential acquirer that offered $1.2BN early in Airwallex’s journey.
- SWIFT: The incumbent global payment messaging network criticized for its outdated architecture.
5. Regulatory/Policy Discussion
While not a deep dive into specific regulations, the discussion implicitly touches on regulatory friction: Zhang noted that early international payments were often conducted under personal names, leading to payment blocks and delays, underscoring the complexity of compliance and counterparty risk in legacy systems.
6. Future Implications
The conversation suggests the future of fintech infrastructure lies in building systems that mimic the speed and efficiency of internet data transfer, fundamentally challenging decades-old architectures like SWIFT. Zhang’s success validates a strategy of aggressive, capital-fueled hyper-growth in infrastructure plays, prioritizing speed over immediate financial discipline.
7. Target Audience
This episode is highly valuable for Venture Capitalists, Fintech Founders, Enterprise Technology Leaders, and Growth Strategists interested in operational scaling, high-stakes negotiation, and the challenges of building foundational global infrastructure.
🏢 Companies Mentioned
💬 Key Insights
"We all wanted to build AWS for financial services."
"Stripe reached out to buy us."
"They were like, no, we're not gonna do it. We literally gonna turn your wheels off and we're gonna keep Shein. And so I basically have 48 hours to integrate with the new partner that able to pay into China."
"We went from zero to a billion dollar transaction volume within like nine months."
"That was on the vision too. To build an alternative to Swift, the largest global payment network."
"I pitch the vision of building the largest payment network in the world, an alternative to Swift. And that fundamental infrastructure is going to be so important and that's going to take years to build. That's why we don't have any revenue."