How he’s fixing cross-border payments with $80m from Tencent and Sequoia

Jack Zhang, co-founder and CEO of Airwallex

This article is part of Tech in Asia’s partnership with The Jay Kim Show where we publish the revised transcripts from the show’s podcast interviews with top entrepreneurs. This is heavily revised from the original show transcripts. For the full interview, go here.

Jack Zhang is the co-founder and CEO of Airwallex, a multinational, cross-border payments platform. He founded the company in 2015 and grew it from four people to over 140 in three years.

The Melbourne-based fintech company has recently raised US$80 million in a series B round with Tencent, Sequoia China, Hillhouse, and Horizons Ventures, among others. This is the second largest funding round in Australia’s history.

Zhang tells us more about Airwallex and their future plans.

Could you tell us about your background?

I was born in Qingdao, China. I went to Australia when I was 15 or 16 to study high school, then I went to the University of Melbourne. After I graduated, I worked in investment banking and financial services, where I traveled to places like London, Hong Kong, and Beijing.

Before I founded Airwallex, I was a solution architect at ANZ, where I designed technical products and solutions from a foreign exchange pricing, risk management, and trading perspectives.

What caused you to start Airwallex?

At that time, my co-founder, Max Li, was running a retail business. So, he would import a lot of materials and packages from Shenzhen and pay the suppliers in USD. Both Max and the suppliers complained about it because Max had to do all the conversion. He tried using Western Union but he was charged about US$400 at the time. There was also a lot of compliance and cost issues.

And it just rang a bell—it was a big pain point. So, we investigated and figured out what could be done in the cross-border payment industry to fix all these pain points and help businesses scale faster. That ultimately became Airwallex’s vision.

Could you walk us through the user experience?

Basically, we offer products to solve anything to do with how people move money (i.e. cross-border, receivables, payables, or forex).

So, the first thing a user would do is to sign up on our website. Then, we do a standard KYC process to understand a user’s identity, the nature of their business, and the company structure. Once a user is on board, everything becomes straightforward.

For example, if you’re a Hong Kong business and you want to pay a supplier in the US, you can just create a batch payment. If you want to do forex conversion, you can book the deal straight away. If you want to do real-time payment, you can ask the recipient to get on Airwallex and perform the transaction instantly.

Everything is on web and mobile. For the slightly larger businesses, we have an API that they can integrate into their product, financial system, accounting system, CRM system, or ERP system. It depends on how they want to automate their product and how large the business is.

We don’t use Swift to send funds, which is why we can guarantee full-amount delivery and faster transaction. We also validate the recipient’s account details before you send money so you can know beforehand if there are any inaccuracies. We use machine learning and AI to do anti-money laundering monitoring.

How do the fees work?

You just raised a large series B round with some big-name investors. What do you plan to do with the money? What are your future plans?