Jack Zhang was 34 years outdated, three and a half years into operating a startup, and sitting throughout from one of the highly effective traders in Silicon Valley. Michael Moritz of Sequoia had invited him to his dwelling — a spot with, Zhang recollects, a few flooring and a view straight to the Golden Gate Bridge — to make the case for promoting.
Stripe wished to purchase Airwallex for $1.2 billion. On the time, the Melbourne firm had round $2 million in annualized income. The mathematics was nearly fairly irresistable: a income a number of someplace close to 600 occasions. Patrick Collison, Moritz argued, was a generational founder. The deal would “compound” into one thing extraordinary. Zhang listened. He walked round San Francisco for 2 weeks, stressed, unable to assume straight. At one level, he stated sure.
Then he flew practically 8,000 miles again dwelling.
“I actually went deep on what motivates me to construct Airwallex,” he stated early this week, chatting with this editor from abroad. “I used to be three and a half years into the enterprise. The enterprise was rising 100 occasions in 2018. And I solely simply form of tasted what it [was like] to be an entrepreneur. And that’s what I’d been dreaming about.”
Two of his three co-founders had voted in opposition to the deal, which helped. However he says the clearest sign got here from wanting on the whiteboard again in his workplace. The imaginative and prescient was nonetheless there, unfinished: to construct the monetary infrastructure that lets any enterprise function anyplace on the planet as if it had been an area firm.
That call is wanting more and more prescient. Airwallex now claims greater than $1.3 billion in annualized income and is rising at 85% year-over-year. It processes approaching $300 billion in annualized transaction quantity. None of it has come simply — and Zhang argues that’s exactly the purpose.
It’s a conviction that runs rather a lot deeper than enterprise technique. Zhang grew up in Qingdao, a port metropolis in northeastern China, and moved to Melbourne at 15 with out his mother and father, barely talking English, residing with a number household. When his household’s funds collapsed, he took on 4 jobs to get by way of a pc science diploma on the College of Melbourne, in keeping with the Australian Monetary Assessment — bartending, washing dishes, working graveyard shifts at a petroleum station, choosing lemons on a farm within the college holidays, which he has referred to as the toughest job he ever had. He went on to spend years writing buying and selling code within the entrance workplace of an Australian funding financial institution, a job that paid properly and by no means felt “deeply fulfilling.”
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Earlier than Airwallex, he began roughly 10 companies: {a magazine} at age 14, an actual property growth firm, import-export operations operating wine and olive oil from Australia to Asia, textiles going the opposite path, a burger chain.
He was operating a Melbourne espresso store when the concept for Airwallex took form. Whereas attempting to pay espresso bean suppliers in Brazil, Indonesia, and Guatemala, his co-founder Max Li saved watching funds disappear into correspondent banking programs — flagged and frozen by American middleman banks implementing OFAC sanctions guidelines, generally bouncing again weeks after they had been despatched. “That pushed me to actually take a look at how correspondent banking works,” Zhang stated, “how SWIFT works, and the way we may construct our personal world cash motion community.”
That’s nonetheless the concept, simply scaled up significantly. Airwallex now holds near 90 monetary licenses throughout 50 markets. Zhang estimates Stripe has roughly half that quantity at finest. Getting these licenses has been immensely time consuming — in Japan alone, the method took seven years. In some rising markets, the corporate needed to purchase shell corporations whose licenses had been not being issued by central banks, then rebuild the expertise beneath them solely.
“You’ll be able to’t actually vibe-code an integration with Mexico’s central financial institution,” Zhang stated. “We now have to have a safe room — you must do a biometric scan simply to stroll in to entry the central financial institution integration.”
The purpose of holding these licenses isn’t regulatory window dressing. In Japan, as an illustration, Stripe and Sq. can course of funds, however they’re required to right away switch funds out to the service provider’s checking account. Airwallex, with its fund switch operator license, can maintain these funds inside its ecosystem. Meaning a buyer can difficulty financial institution accounts, difficulty playing cards, and spend cash with out it ever leaving the platform.
The international change economics alone are substantial: a U.S. service provider settling transactions in Australian {dollars} avoids the two% to three% conversion charge that processors like Stripe sometimes cost to maneuver a reimbursement into U.S. {dollars} — and may use these native balances to pay native distributors, run payroll, and canopy digital advertising bills, all at interbank charges.
“You don’t actually function like a U.S. firm anymore,” Zhang stated. “You use like an organization with entities all over the world, however without having to bodily arrange these entities.”
The gradual construct was intentional, and Zhang has a framework for it that he returns to typically: the “path of most resistance.” Each license, each financial institution integration, each native cost rail that Airwallex painstakingly assembled created a layer that makes it tougher to compete in opposition to. “It took us six and a half years to get to $100 million in annual recurring income,” Zhang stated. “However after that, it took simply over three years to get to a billion.”
The aggressive logic, in his telling, comes all the way down to one thing primary about what it means to personal infrastructure versus using another person’s. In case you don’t management the end-to-end cost workflow and one thing goes mistaken, you possibly can’t entry the underlying knowledge to clarify it to your buyer. You’ll be able to’t lengthen new merchandise cleanly on high of another person’s stack. “Constructing on high of different infrastructure,” he stated, “is solely not scalable.”
For many of its life, Airwallex and Stripe have principally operated in numerous geographies, promoting to totally different patrons. That’s altering. As Stripe pushes deeper into worldwide markets, and Airwallex makes its first critical strikes into america, the overlap is rising.
The customer for Airwallex has traditionally been the CFO’s workplace in Australia and Southeast Asia, the place the corporate is already well-established — finance administrators, treasury groups — which places it in a unique gross sales movement than Stripe, whose buyer acquisition has been pushed largely by U.S. builders selecting a default start line for a brand new firm. Greater than 90% of Airwallex prospects land first on a enterprise account product, and funds and spend administration comply with from there. Over half are utilizing a number of merchandise, says Zhang.
Nonetheless, there are challenges that Zhang doesn’t attempt to downplay. The most important could also be that Stripe is Silicon Valley’s golden little one, its privately held shares having minted millionaires throughout the tech trade. One other is the accompanying model hole. Airwallex must embed itself within the considering of engineers and builders — not simply finance groups — in order that founders attain for it instinctively. “Our model is simply not there but,” he stated. “That’s a tougher competitors to win.”
It’s a contest being watched intently from a wide range of vantage factors. Sequoia backed Airwallex early — although the deal was sourced by way of Sequoia Capital China, which has since spun out and rebranded as Hongshan — and stays one of many firm’s largest shareholders. The funding agency Greenoaks Capital holds stakes in each corporations, too. Zhang shrugged off any suggestion of awkwardness round these overlapping cap tables. The traders, he famous, are betting on a big market.
Nonetheless, it brings up the valuation query. Stripe was valued at $159 billion in a February tender supply — up 74% from a 12 months earlier — after processing $1.9 trillion in complete cost quantity in 2025. Airwallex, assigned an $8 billion valuation in December, is valued at roughly a twentieth of that. However in keeping with Zhang, Stripe’s cost quantity is just about six occasions Airwallex’s, not 20 occasions. At 85% annual development and projecting $2 billion in income throughout the subsequent 12 months, Airwallex is closing the income hole sooner than the valuation hole would recommend.
Whether or not the market ultimately notices is a unique query — one which an IPO, which Zhang says is not less than three to 5 years away, would pressure into the open.
Within the meantime, Zhang says he’s centered on longer-horizon targets: one million prospects by 2030, $20 billion in annual income, common income per buyer rising from round $12,000 to $13,000 in the present day to roughly $20,000. A collection of AI-powered autonomous finance merchandise — brokers that don’t simply floor knowledge however really execute transactions — is rolling out now. The thesis is {that a} decade of monetary knowledge throughout all the company finance stack, from income assortment to treasury administration to vendor funds and bills, has created a coaching set that no competitor can replicate in a single day, he suggests.
Now to see if all that tough work is sufficient to eat into Stripe’s market share. For now, the competitors appears to be enjoying out at a distance. Zhang and Collison had been by no means pals, however they had been pleasant whereas merger talks had been ongoing years in the past. Final 12 months, Zhang and Collison had been each at Greenoaks Capital’s annual gathering. They didn’t communicate.
