He Turned Down $1.2 Billion From Stripe. Now His Company Is Worth $8 Billion

Airwallex: From Humble Beginnings to a Billion-Dollar Fintech

Key Concepts: Founder Effect, Fintech, Cross-border Payments, SWIFT System, Entrepreneurial Resilience, Company Culture, Scalability, Revenue Growth, Anti-Fraud Technology, Product-Market Fit.

Early Life and Initial Drive

Jack Zhang, the co-founder and CEO of Airwallex, was born in Qingdao, China, and relocated to Melbourne, Australia, at the age of 15. Facing financial hardship after his family’s collapse, he was compelled to become self-sufficient. He describes a grueling period of working multiple jobs – factory work, lemon farm labor (12 hours a day in 40°C heat), bartending, and overnight shifts at petrol stations – to cover tuition and living expenses. He often worked 15-16 hours a day, 5-6 days a week. He recounts instances of walking all night in winter due to lack of funds for transportation, highlighting his unwavering work ethic. Despite these challenges, he earned a Computer Science degree from the University of Melbourne in 2007.

“I think I have two choices. Either I returned to China and try to go back to the education system there or I continue to stay in Australia and figured out how to pay the tuitions and uh the livings on my own.” – Jack Zhang

From Side Hustles to a Defining Problem

After entering the banking industry, Jack found it unfulfilling and began pursuing various side businesses, including textile importing/exporting, olive oil and wine trading, and real estate development. While these ventures generated profits (reaching a few million dollars annually), he lacked a deeper sense of purpose. The birth of his daughter at age 30 served as a catalyst for change, prompting him to seek a venture he could be truly passionate about.

He discovered the core problem that would become Airwallex through his co-founder, Max Lee’s, experience with a coffee business. Max frequently wired money internationally to purchase coffee beans, encountering significant FX fees and delays – money that would “disappear for a few months and bounce back.” This led Jack and Max to investigate the existing global payment infrastructure, specifically the SWIFT system (built in the 1970s), and question its inefficiencies. They envisioned building a parallel payment system to fundamentally change how money moves globally.

Founding Airwallex and Early Funding

In December 2015, Jack resigned from his banking job and dedicated himself fully to Airwallex. He partnered with Max Lee, Jacob Dai, Ki-lok Wong, and Lucy Liu to co-found the company. Lucy Liu provided the initial seed investment of $1 million within a week of meeting Jack, demonstrating early belief in the vision. Within two years, Airwallex secured a $13 million Series A funding round backed by Tencent and HongShan Capital Group (formerly Sequoia Capital China).

The $1.2 Billion Offer and the Decision to Scale

In 2018, just three years after founding Airwallex, the company received a $1.2 billion acquisition offer from Stripe. Despite the substantial offer, Jack and his co-founders decided to decline.

“We never thought that we can get that from one of the best companies in the world, right? So very intrigued, but at the same time just feel that we only just getting started.” – Jack Zhang

Their decision was based on a belief that they had not yet achieved their full entrepreneurial potential, a strong optimism about the company’s future, and a realization that financial gain alone wouldn’t provide lasting fulfillment. Following the rejection, they invested over 80% of their cash reserves into developing new products, anticipating a 3-4 year period without revenue generation. These investments ultimately proved crucial, now accounting for 60% of the company’s revenue.

Challenges and Growth: Navigating Turbulence

Airwallex’s growth wasn’t without significant hurdles. The company faced challenges including fraud issues in 2019 (due to insufficient anti-fraud technology), a 50% business loss during the initial stages of the COVID-19 pandemic in 2020, and difficulties in raising external funding following the 2021 market crash. In 2022, they were burning through almost $200 million annually, prompting a focus on achieving profitability. Jack admits to considering the Stripe offer during these difficult times but ultimately believes they made the right decision to persevere.

He also acknowledges early mistakes, including delayed investment in HR support, premature international expansion before achieving product-market fit in the UK, and making poor hiring choices. He emphasizes the importance of rapid iteration and learning from failures.

“So many… mistakes and we almost made all the mistake as a tech company founder that we shouldn’t make.” – Jack Zhang

Current Status and Future Goals

As of December 2023, Airwallex raised another $330 million in a Series G round, achieving a valuation of $8 billion. The company has surpassed $1 billion in annualized revenue, demonstrating a 90% year-on-year growth rate. Airwallex currently processes payments in 120 countries, serves 200,000 businesses, and facilitates over $200 billion in annual transactions.

Jack’s current goal is to serve over a million customers and achieve $10 billion in revenue by 2030. He emphasizes the importance of teamwork and acknowledges the collective effort behind the company’s success. He typically works 70-80 hours a week, prioritizing deep thinking and strategic decision-making over simply avoiding mistakes.

“I very rarely feel proud of myself and uh I think I I feel proud of uh the team.” – Jack Zhang

Technical Terms & Concepts:

• Fintech: Financial technology – companies using technology to improve or automate financial services.
• Cross-border Payments: Transactions involving transfers of money between different countries.
• SWIFT System: The Society for Worldwide Interbank Financial Telecommunication – a network that enables financial institutions worldwide to send and receive information about financial transactions. It’s a decades-old system that Airwallex aims to modernize.
• FX Fees: Foreign Exchange fees – charges levied for converting one currency into another.
• Product-Market Fit: The degree to which a product satisfies market demand.
• Anti-Fraud Technology: Systems and processes designed to prevent fraudulent transactions.
• Burn Rate: The rate at which a company is spending its cash reserves.

Logical Connections:

The narrative follows a clear chronological progression, starting with Jack’s challenging upbringing, moving through his entrepreneurial experiments, the founding of Airwallex, the pivotal decision to reject the Stripe offer, the subsequent challenges and growth, and finally, the company’s current status and future ambitions. Each stage builds upon the previous one, demonstrating how early experiences and lessons learned shaped the company’s trajectory. The discussion of challenges is interwoven with the successes, providing a realistic portrayal of the entrepreneurial journey.

Data & Statistics:

• $1 million: Initial investment from Lucy Liu.
• $1.2 billion: Acquisition offer from Stripe in 2018.
• $1 billion: Annualized revenue reached in 2025.
• $8 billion: Current company valuation (December 2023).
• $330 million: Amount raised in Series G funding round (December 2023).
• 120 countries: Number of countries where Airwallex processes payments.
• 200,000 businesses: Number of businesses served by Airwallex.
• $200 billion+: Annual transaction volume processed by Airwallex.
• 90%: Year-on-year revenue growth rate.
• $200 million: Annual cash burn in 2022.

Synthesis/Conclusion:

The story of Airwallex, as presented, is a compelling example of entrepreneurial resilience, strategic vision, and the power of believing in a long-term mission. Jack Zhang’s journey from a difficult childhood to building a multi-billion dollar fintech company underscores the importance of hard work, adaptability, and a willingness to take calculated risks. The decision to reject a lucrative acquisition offer, despite facing subsequent challenges, demonstrates a commitment to innovation and a belief in the potential of Airwallex to fundamentally reshape the global payments landscape. The company’s success highlights the growing demand for modern, efficient, and cost-effective cross-border payment solutions.