Cambrian Fintech with Rex Salisbury
00:12:03 · Jack Zhang
[00:12:03] S1: Yeah. I think the first business I started was actually selling phone cases, you know, on eBay and and Amazon. Then I started other... And then that business is actually doing well. And and later on, that that business that I partnered with got acquired by the property for for more than, you know, 6 figures. And also started, I guess, importing textiles from China, exporting olive oils and red wines from Australia, started, like, a burger business, started coffee business, started an architecture firm, and a real estate development business. Can all... Basically, I try to figure out what I can do, and then partly because I really wanted to make money because my financial situation, you know, when I was 16 really burnt me, and I never wanna be in that situation again. The other reason just I wanted to find something I really love to do and a business, and... But I never kinda wanted to resign from my from my full time job, which is, you know, an engineer that does trading over zones and market making stuff in the investment bank. And I keep the job because I love love coding, and I I know that one day I wanted to build some sort of business in tech that can scale, you know, using using my skills just to scale the business. And that... That's kind of the core reason I was doing many things on the side, but I always keep my job. And AirWallax was kind of really the opportunity I followed through without doing that profit business. We were importing beans from from Brazil, from Indonesia, and heroes from from China. And we were using banks in Western Union to make international payments, and we found it's something extremely expensive and slow of those... Using those those e commerce to move money around the world. And and we thought, can't we build a brand new infrastructure that from the ground up to move money as fast or as the information, which which which is effective what, you know, partly what what AirWallace do today.
00:14:14 · Rex Salisbury, Jack Zhang
[00:14:14] S0: Yeah. Anyone who thinks that all the work in fintech is done has not tried to move money internationally because it is still quite difficult. [00:14:23] S1: I mean, the... You know, obviously, there's a bunch of fintech in this space. You know, you have Wise and you have Neum and in that kind of infrastructure space, and that's kind of where... How we got started initially, but we moved away from that kind of infrastructure business pretty much today. And, you know, in 2018 or 2019, that's basically 95% our revenue. But today, that's, like, 15% of our revenue, which is kind of a very, very small part of our business now. We really evolved from a infrastructure business to a multipart platform that directly facing merchant as a one stop shop to helping, you know, the customers with a bunch of, you know, paying apps like merchant acquiring, billing, you know, invoicing, etcetera, to help them to receive money around the world, to managing... And also managing the the spend of those businesses around the world and help with all the treasury match right in the middle. [00:15:23] S0: Yeah. One thing people are excited about for international money movement is stablecoins. You've been pretty skeptical as to their utility. What's your current thinking on stablecoins?
00:15:36 · Jack Zhang
[00:15:36] S1: I think we we obviously tried to use stablecoin as a sort of weakened liquidity as well as sort of using stablecoin to, you know, moving money in these Nordic countries. So right now, we built proprietary infrastructure in over a 130 plus countries and using our own network and liquidity providers. And we probably work with more than 80 banks around the world to giving us liquidity. And it's still very hard to find... Because our our cost on these auto currencies is about 10 to 15 basis point. On weekend, it's about 30 basis point of a buffer that we kinda really use. It's still very hard to find stable point liquidity that cheaper than sort of 10 to 15 basis point or 30 basis point on the weekend, so it's kind of not really that useful to us. And, you know, as the the, you know, the demand or the supply keep growing in it, you know, maybe one day that we'll... We were able to get the on ramp and off ramp costs sort of below the cost that we have today using the traditional rails. But but today, we we still largely rely on our existing infrastructure, which we kind of moving now $200,000,000,000 a year, 95% with our whole rails adds, you know, more than 65% is sort of instant or near instant. And we don't really see a big application of of using stablecoin to just provide a movement yet at this point. And, obviously, that's kind of a usage, you know, from my bridge, but the like of, you know, they helping, like, SpaceX to collecting money from Africa, and then you have, you know, on one side, and you have, you know, these exchanges that are paying money to to the the traders in in these countries, sending these payments to to those global south country, and you can net it off, essentially. But that's not that's not a use case that we have been very interested in because the... At the the day, the volume is still quite small to to the scale we are today.
00:17:52 · Rex Salisbury, Jack Zhang
[00:17:52] S0: And I understand what you're saying. You know, you're moving $200,000,000,000 a year. You build infrastructure in a 130 countries over the course of nine years. You get liquidity. It costs you 15 bips or less, so stablecoins maybe don't have a lot of utility. [00:18:06] S1: Well, g 10 g 10 currency costs us, like, a quarter of a basis point. You know? [00:18:10] S0: Yeah. Exactly. [00:18:11] S1: Well, 10, 15 basis point is for exotic currencies like Indonesia or, you know, India, you know, these type of corridors, not even not even for the for the g 10 or g 20 currencies. [00:18:21] S0: Yeah. So sub one basis point even for for liquidity in those currencies. But I'm curious if you look down the road and you say, Is that still gonna be the case in three years where it's like, stablecoins maybe are only relevant for exotics, so currencies that aren't as actively traded? Or maybe as the demand builds, it starts to unlock more utility in other layers? Like, what what do you think would have to shift to start to change your perspective? Or are there corners of the market where you think it has more utility... Potential utility in the near term?
00:18:50 · Jack Zhang, Rex Salisbury
[00:18:50] S1: I think what's interesting is what happened if the stablecoin never really into off ramp. And if, you know, whatever the money that... In stables that actually stay in stables and there's a wider acceptance of merchant that wanted to keep the money in stables, then essentially just moving money on the ledger. Right? So... At the... Let's securitize ledger. So I think that will be a little more interesting, but, you know Yeah. For that to happen, you need to build a Internet native financial ecosystem. And, you know, I think a lot of interesting part are now being built, like stablecoin backed, card. You know, for example, that if the money basically, stay on the Internet, you can issue a card to spend on fiat, that never really need to do the off ramp. The ramp... Off ramp become a settlement process, which is kind of irrelevant from a consumer standpoint. I think you will see more of these use cases start developing first instead of, you know, just purely useful money mover where, you know, the off ramp is still required. And as you're building out the Internet native financial ecosystem, there's there's gonna be more adoption on stablecoins, and there's a possibility in the longer term, like, we say three to five years, there'll be a wider adoption from a merchant and consumers, and and that's where the stablecoin use case is gonna be a lot more interesting. [00:20:13] S0: Yep. Also, yesterday, you just shared a tweet about some current stats on the company. Could you share those here too and give us a sense of where Airwallex is today?
00:20:13 · Rex Salisbury, Jack Zhang
[00:20:13] S0: Yep. Also, yesterday, you just shared a tweet about some current stats on the company. Could you share those here too and give us a sense of where Airwallex is today? [00:20:24] S1: Yeah. So we... As overall business, we're doing pretty well. So in terms of annualized revenue, we... We're doing close to 900,000,000,000, and we also grow about 95% year on year as as last month. And, you know, as of this month now, we're processing over $200,000,000,000. So that's kind of the the latest stat. I think there's a very few fintechs at this scale still growing at this speed. I think, Airwallet is definitely one of the fast growing, fintech and payments platform in the world right now. [00:20:56] S0: And how do you define your market? Like, do you... Like, oh, man. You know, we can grow this fast for another five years, then our market's tapped out. Like, how do you think about scaling and scoping that, and what are the next big unlocks?