Jack Zhang was 34 years previous, three and a half years into working a startup, and sitting throughout from probably the most highly effective buyers in Silicon Valley. Michael Moritz of Sequoia had invited him to his house — a spot with, Zhang recollects, a few flooring and a view straight to the Golden Gate Bridge — to make the case for promoting.
Stripe needed to purchase Airwallex for $1.2 billion. On the time, the Melbourne firm had round $2 million in annualized income. The mathematics was fairly irresistible: 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 mentioned sure.
Then he flew practically 8,000 miles again house.
“I actually went deep on what motivates me to construct Airwallex,” he mentioned early this week, talking to 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 type 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 earth as if it have 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 practically $300 billion in annualized transaction quantity, he says. None of it has come simply — and Zhang argues that’s exactly the purpose.
It’s a conviction that runs so much deeper than enterprise technique. Zhang grew up in Qingdao, a port metropolis in northeastern China, and moved to Melbourne at 15 with out his dad and mom, 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, based on the Australian Monetary Evaluation — bartending, washing dishes, working graveyard shifts at a gasoline station, choosing lemons on a farm over faculty 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 nicely 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 working wine and olive oil from Australia to Asia, textiles going the opposite route, a burger chain.
He was working 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 stored watching funds disappear into correspondent banking methods — flagged and frozen by American middleman banks imposing OFAC sanctions guidelines, generally bouncing again weeks after they have been despatched. “That pushed me to essentially take a look at how correspondent banking works,” Zhang mentioned, “how SWIFT works, and the way we may construct our personal international 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 have been not being issued by central banks, then rebuild the expertise beneath them completely.
“You possibly can’t actually vibe-code an integration with Mexico’s central financial institution,” Zhang mentioned. “We’ve 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 instantly switch funds out to the service provider’s checking account. Airwallex, with its fund switch operator license, can maintain these funds inside its ecosystem. Which means a buyer can difficulty financial institution accounts, difficulty playing cards, and spend cash with out it ever leaving the platform.
The international trade economics alone are substantial: a U.S. service provider settling transactions in Australian {dollars} avoids the two% to three% conversion price that processors like Stripe sometimes cost to maneuver a refund into U.S. {dollars} — and may use these native balances to pay native distributors, run payroll, and canopy digital advertising and marketing bills, all at interbank charges.
“You don’t actually function like a U.S. firm anymore,” Zhang mentioned. “You use like an organization with entities all over the world, however while not having to bodily arrange these entities.”
The sluggish 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 has created a layer that makes it more durable to compete in opposition to. “It took us six and a half years to get to $100 million in annual recurring income,” Zhang mentioned. “However after that, it took simply over three years to get to a billion.”
The aggressive logic, in his telling, comes right down to one thing primary about what it means to personal infrastructure versus driving another person’s. When you don’t management the end-to-end cost workflow and one thing goes mistaken, you’ll be able to’t entry the underlying information to elucidate it to your buyer. You possibly can’t lengthen new merchandise cleanly on prime of another person’s stack. “Constructing on prime of different infrastructure,” he mentioned, “is just not scalable.”
For many of their lives, Airwallex and Stripe have largely operated in several geographies, promoting to completely different patrons. That’s altering. As Stripe pushes deeper into worldwide markets, and Airwallex makes its first severe strikes into the USA, 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 clients 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 largest 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 pondering of engineers and builders — not simply finance groups — in order that founders attain for it instinctively. “Our model is simply not there but,” he mentioned. “That’s a more durable 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 buyers, 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 provide — 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 based on Zhang, Stripe’s cost quantity is barely 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 no less than three to 5 years away, would power into the open.
Within the meantime, Zhang says he’s targeted on longer-horizon targets: one million clients by 2030, $20 billion in annual income, common income per buyer rising from round $12,000 to $13,000 right now to roughly $20,000. A collection of AI-powered autonomous finance merchandise — brokers that don’t simply floor information however truly execute transactions — is rolling out now. The thesis is {that a} decade of monetary information throughout the whole 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 arduous 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 have been by no means pals, however they have been pleasant whereas merger talks have been ongoing years in the past. Final 12 months, Zhang and Collison have been each at Greenoaks Capital’s annual gathering. They didn’t communicate.
