Fintech Insider Podcast by 11:FS
00:24:47 · Pranav Sood
[00:24:47] S3: Yeah. So I think the first thing is, from a product perspective, you've got to be as close to the metal as you possibly can be. And Jack, my boss, our CEO, is incredibly passionate about that himself. And so from the very beginning, his approach has always been, we need to go and get licenses. You know, we need to be a principal acquirer. We need to be a principal issuer. You know, we need to be as close to the metal as we're able to be so that, you know, we have the ability to be deep and we can talk to our customers about the kind of feature depth and feature requirements that they have because we're close enough then. And also, frankly, because the economics work much better if you are closer to the to the metal. I think the other thing is is also about the the way that you educate customers about what it is that your product can can really do. And so, you know, for us, for example, you know, the last year or so, people have been talking more and more about Swift. I think SWIFT sort of finally crossed the chasm, like, fifty years after it was invented because of the action that that the the West took against Russia, you know, in the initial waves of sanctions. And so suddenly, you had all these explainer articles in in in the newspaper saying, what is Swift? You know, how does it work? And so for us, you know, it's also being able to say to people, look. You know, you're just finding out about Swift. Let's blow your mind. 94% of the payments that we do actually go through local rails on both sides, so they don't touch Swift. And so people are like, okay. Wow. You know, get it. And so, you know, partly, for a product perspective of, cool. How do we, you know, how do we really push ourselves to get deep? And then partly, it's an education, you know, question, which is how do you make sure that you're telling people always, you know, hey. This is this is what we can really do, and this is the value critically that we add, for you by doing that.
00:26:33 · David Barton-Grimley
[00:26:33] S2: And on the flip side of that, I guess, like, what what would you say are the main challenges or issues that you you would be tackling right now in your growth?
00:26:43 · Pranav Sood
[00:26:43] S3: I think the first and biggest one is always that there is so much to do and not enough time and never enough resource to do it. And so, you know, when you think about our product roadmap for the for the coming year, the number one starred priority is infrastructure. And so we are constantly looking to build out our infra capabilities, you know, looking both geographically, so for example, expanding into LatAm or expanding into The Middle East, looking at, you know, additional features and functionality, you know, including like credit, for example, and doing things, you know, that expand what we already have in ways that our customers are excited about. And so the hardest thing is always making those trade off decisions about, you know, do we, you know, do we expand in The Middle East? Do we do Japan? Do we do this? Whatever. And, know, in an environment where the other big challenge is around how do we make sure we're building not just a business that grows very quickly, but also a business that's going to be long term sustainable. The question about prioritization becomes even harder because, you know, two, three years ago in a different, you know, environment from a funding perspective, you might have just been able to say, whatever, we'll just burn another, you know, x million dollars by hiring another x product teams to do this work. In today's, you know, environment and and given where we are as a business, we don't wanna make those choices. We wanna be able to say, hey, you know, we're making some pretty pretty important decisions from a product perspective. We're doing that in a way that allows us to be sustainable and cash flow positive as a business as well. And that that's why that's that's why they pay Jack the big bucks to help us to make those decisions.
00:28:19 · David Barton-Grimley
[00:28:19] S2: Yeah. The entire industry is facing into the same challenges, I guess. So, know, it has been a tumultuous 2022 after a couple of years of rapid growth during COVID, as you say. You know, what are your thoughts or outlook specifically for 2023? Are you seeing any signs of positivity in the funding market or in the industry in general? And if so, where would that be?
00:28:41 · Pranav Sood
[00:28:41] S3: So we... We're very fortunate. We raised at 5,500,000,000 back in 2021, and we actually raised a small top up in 2022 in November from new investors at the same valuation on the same terms, which is just about as good as I think you can do in in the current environment given all the challenges that they've been both for private and publicly listed businesses in our space. And so we are very fortunate to enter 2023 with a very robust balance sheet and lots and lots of room to continue to invest. I think when we look at the investment landscape, you know, clearly, people are taking a long, hard look at some of the earlier stage businesses in the market. You know, the series a, b, c businesses, I think, are are finding it harder and harder to, you know, continue that lovely escalator of up rounds every six, twelve months that that perhaps they got used to to doing. But we also see lots of investors who still maintain the same fundamental belief in the market opportunity and the potential of our products and our services. And I say are in the general sense of fintech rather than ours as Airwallex, to transform the way that people do business and and also, frankly, for consumers as well, you know, live their lives. And so, you know, we do see that optimism. We do see people continuing to want to invest in in category creating, category defining businesses. But I do think, you know, the changes being number one, more and more focus on who actually owns the infrastructure. So, you know, businesses, you have that defensibility and have that moat are more attractive. And then number two is how do you actually make sure that you grow with sustainable unit economics in a way that means that you can continue to expand sustainably versus constantly needing to re up and and and kind of need that sugar hit of VC investment.
00:30:30 · David Barton-Grimley
[00:30:30] S2: And that's got to be a positive thing, guess, in the in the long term for the industry for it to be sustainable and profitable. I mean, would you would you say there is a lesson or couple of lessons that you've learned in the last year or so or maybe that the the industry as a whole has has learned?