Cambrian Fintech with Rex Salisbury
00:00:29 · Jack Zhang, Rex Salisbury
[00:00:29] S1: I think it was really early in our journey. Right? We've only been sort of around for three years, and the business really just been scaling for, you know, less than twelve months. And we went to... You know, we went from nothing to little over a billion dollar volume within twelve months' time, and the business is growing really fast. Haven't really been able to sort of enjoy, you know, the startup founder journey yet. That's probably one thing. And I think the other thing is what we found, you know, is that Stripe is very much of a payment led business. And, you know, Airwallet's at that time, we're really focused on global money, but it's moving to global business bank. And we, you know, already have more licenses at Stripe at that point and are kinda getting even further on the on the banking side. And we sort of feel it's the right thing to do, just keep as independent business to continue to build towards our vision, you know, to to build the future of global banking to help all the businesses expanding globally and opening the business with efficiency at that speed and and save them costs. And I feel just too early in our journey to to make a sale decision and I'd rather kind of continue to build towards our mission at a time. [00:01:58] S0: And what was that thing that drove the growth from zero to a billion dollars in total payment volume in a year? Maybe talk about some of the big customers that helped drive that and the initial unlock.
00:01:58 · Rex Salisbury, Jack Zhang
[00:01:58] S0: And what was that thing that drove the growth from zero to a billion dollars in total payment volume in a year? Maybe talk about some of the big customers that helped drive that and the initial unlock. [00:02:09] S1: Yeah. We... You know, when we build the product that we actually had Mastercard and Tencent to a Belargis customer, And they both, you know, promise very big volume, but, unfortunately, once the product gone live end of twenty seventeen, we found this... You know, the the actual volume we're getting is, like, less than 1% of of what we're actually expecting. So at that point, we really scrambled, you know, try to find, you know, the next the next big customer to help us to grow. And we we thought go product market fit in the ecommerce industry. It essentially, you know, marketplaces paying out to vendors or suppliers or sellers globally. And we also found product market fit for a lot of tuition payment providers that need to send tuition payments globally. And that's kinda too big using. It's not like a thick or big customer per se, but, like, you know, you have to say, you know, like, I think Xian was one of the biggest customer at that time and, and then a bunch of sort of tuition provider... Tuition fee providers, A competitor of of of what's The US company called? Something Flyer. That's kind of the the the the industry that we bought from our affiliate launch initially.
00:03:30 · Rex Salisbury
[00:03:30] S0: So there's some big waves around fast fashion, around Xian, and then also tuition payments and some other things. You know, a lot of fintech founders, they have these large enterprise deals. They spend years chasing. They go really slowly, and then maybe eventually they're lucky taking off. Be curious to hear about that, like, the years 2017 to 2018 and '19 when it wasn't working, what it felt like to be working on those partnerships. I think there's even a series a term sheet that maybe got pulled at some point in time, like there's a lot going on then.
00:03:59 · Jack Zhang
[00:03:59] S1: Yeah. We changed the direction of product twice early on in the journey between, you know, when we started the company in 2015 to 2017. So initially, we were basically trying to find a way to, you know, effectively moving money and trading our facts by ourselves just build... By building a network of participant. But we just couldn't really find a way to scale that two sided sort of marketplace, and we never really kind of took that, launched that product to the market. And the second product we built is really kind of an invoicing product so that sellers can send invoices globally to kinda get paid. And we basically cold called some of the investment banks, and and we were lucky that, you know, one of them and Macquarie Bank out of Australia that agreed to giving us liquidity from the Interbank. Then we build a fixed engine, you know, able to streaming price from from Macquarie. They were able to basically giving Interbank FX price to the retail customer. And that's kind of the initial sort of product that we built that we actually got a few 100 customers, the SMBs in Australia are selling globally, but we just couldn't get enough customers to scale. And we then build the API business to, you know, targeting larger ecommerce marketplaces and tuition provider to setting payments globally. That's kind of where we really got the initial part of MarketFed, and that's what help us to raise the Series B and, you know, also got the acquisition offer from the start.
00:05:41 · Rex Salisbury
[00:05:41] S0: Yep. So starting off with, you know, a 100 plus SMBs in Australia for FX, moving up into large scale marketplaces, but still focused on ecommerce tuition payments. And then talk about the journey you've been on since 2019 because you've now gone from FX into business banking accounts and building a whole new set of layers on top of that for, you know, spend, expense management, corporate card issuance, that those sorts of products. So just give us kind of the overview of of where Airwallex is.
00:06:09 · Jack Zhang
[00:06:09] S1: Yeah. So I think if you kind of roughly break down the journey of Airwallex, it's probably, I would say, three part. The first part is really focused on global money movement, whether it's sort of collecting money, currency conversions, paying out to to individuals or businesses globally, and then various sort of API driven selling to large enterprises and platforms that will cause kind of the phase one of the business. And then phase two, really, what we realized is as a in... As as a infrastructure provider, you're always facing margin compression, kind of competitions in a certain corridor with the local providers, and scalability issues. It just feels that we always sort of not able to control our own destiny. So then we kinda then enter to the phase two of the of the two businesses that we basically pivoted back again to our original idea of empowering SMBs to grow that business globally is with building application layer on top of our financial infrastructure, like global bank account, corporate cards, then sort of merchant acquiring, that we're able to acquiring this SMB directly become the one stop shop for these SMBs to help them to grow their business globally, to collecting the revenue, to help them to paying the vendors, suppliers, employees, and whatnot, and managing the treasury in the middle. And the phase three, I would say, is to start building the business operating system, which is the, you know, a bunch of software applications across expense management, bill pay, reimbursements, vendor management, procurement. And on the revenue side, it's like a billing, invoicing, you know, merchant record, etcetera, etcetera. Right? So... And now, you know, we can layer in AR on top of that. So that... I think that's kind of, like, which is sort of phase three of the company, which is building this free vertical integrated financial infrastructure plus business operating systems slash software plus AI. And, you know, we're kind of on that phase three right now. Not saying that the phase two and phase phase five, phase two is not helpful, but it just really build the foundation of the business. And and that kind of... We started building the software layer from 2019, and I think that proven to be one of the best decisions we made that we can fully leveraging the PowerAI to start building autonomous products.