Cambrian Fintech with Rex Salisbury
00:08:38 · Jack Zhang, Rex Salisbury
And without kind of betting big on that decision today, we weren't able to to achieve so. [00:08:44] S0: Yep. And I also wanna back up all the way because you have a pretty interesting story about how you started Airwallex in the first place, and you've started a diverse array of businesses. So let's go all the way back to high school and talk about your very first job, and then can talk about some of the other businesses you started preceding Airwallex.
00:09:06 · Jack Zhang
[00:09:06] S1: Yeah. So I started my first business as, like, you know, like a student back then called Urban Exploration, where, obviously, nobody getting paid, and we we essentially wanna help the school to raise some money for student activities, but nobody really wanted to give us some money. And one of the merchant that... Or restaurant wanted to... Us to help them to send some flyers around that we... To to... So so that they can give us some money. We thought it's very ineffective and... Because nobody wanna take our flyers on the street. And we thought, why don't we create some content that, you know, so that student actually love to read and that that could be kinda more interesting if we can inserting these coupons or vouchers or ads into the into the into the magazine. Because the content we actually create are quite interesting, it's actually been viral in our city, and then we end up, you know, able to, you know, penetrating all the high schools in in my city, and we're able to onboard, like, a few thousand merchants and they're working with us. So we actually been quite profitable from day one, partly because, you know, none of the student getting paid and we're using the school's printer to print out this this this magazine for free. But we went out made decent income, you know, I think after after a year and a half and before I left the the country to to to move to Melbourne. But that's kind of the first real taste of success in in business, although it's not entirely a powerful business.
00:10:36 · Rex Salisbury, Jack Zhang
[00:10:36] S0: Yeah. And I also... I love that story, but I also love the story of the jobs that you worked in high school. So, like, why were you working the jobs, and what what were some of those? The lemon factory, I think, is an interesting story as well. [00:10:47] S1: Yeah. I worked in, you know, as a kitchen hand in the restaurant. I basically washing dishes and clean up oysters and, you know, I work in a in a volcano station, whatever you wanna call it, basically, doing deep frying, all sort of stuff and, around, post high school. And, then I went to work in a lemon factory after I graduated from high school before I went to college. And then I did a bartender job, you know, in... While I was in college. Normally, it's between sort of four to... 4PM to midnight, and I did work in a petrol station between midnight, 8AM so I can get paid a bit more. Not that I wanted to do all this. It's just that, you know, I lost financial support from my parents. You know, my dad lost his job, and then and I had to basically figure out a way to to live and... By myself and then pay a tuitions. You know, I had no choice but working all these sort of crazy hours and jobs throughout the college. [00:11:46] S0: Yeah. And some of your first businesses, I think post college, you had a wine and olive oil trading company and also a cafe in Melbourne. Curious to hear a little bit about those businesses, but then also how do you go from that to deciding that you wanna start something like Airwallex?
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.