From zero to US$6.2 Billion: Lucy Liu on the Airwallex strategy that broke global payments

0:01I mean, I didn't really know what I was getting myself into, but we started in 2015. We didn't see any substantial revenue until 2018. So for three years, it was very difficult. We had to throw away a product that we were building and we're just constantly burning money. And Jack drew a really, really ugly unicorn on the whiteboard. He literally wrote 2019 and then really ugly unicorn next to it. That we're going to go 10 times in valuation in two years. Everyone laughed a little bit because we knew that we were doing something important and big and we're very ambitious. But still, like, how are we going to do that, right?

0:40We have zero revenue. What have you learned about growth? Truths of the last 12 months about the magic of Airwallex's growth engine? I think growth starts with solving a real problem. And it has to start somewhere. And I think also your northern star has to be really far away and ambitious. A few companies add$100 million of ARR every quarter and get faster. Airwallex has cash flow positive, multi-product, moving$200 billion a year. Today, co-founder Lucy opens the playbook. You'll learn about the product bet that set them up to accelerated scale. The simple land one must have then expand move that turns a single win into a full finance stack.

1:26Her PMs act like mini founders to keep 1 ,800 people moving fast. the exact no's that prevent feature creep, and how to partner with banks you seem to compete with. I'm Mason Yates, an investor at Blackbird, and this is Wild Hearts. So I caught the recent headlines with Airwallex preparing to go public. I'm not going to reel you on that, that's for sure. But what it does say is it tells the world that something is special at Airwallex right now. and I just wanted to hear from an insider's perspective, like what has the last 12 months been like? So last 12 months definitely has been massive growth for us, you know, in terms of geo, in terms of revenue, in terms of everything.

2:16So lots of things happening for us. And I think, you know, strategically, we are now growing beyond just, you know, know, a payments provider or a payments platform. And we're doing a lot more financial products. Like, you know, we launched Yield in Australia. We're doing expense management. We're doing spend management, treasury management. So I think every day is very fast paced at AdWallix, but I think the last 12 months, even more so. And so we just did our Series F earlier this year. And I think we're at a stage where, you know, these things are no longer like a milestone anymore. And it's a lot more focused on the numbers and how we're growing and how we can, you know, actually stay true to our mission that, you know, still be a startup at our core.

3:09But obviously, at the same time, you know, growing really quickly. I mean, if a company comes and says, we are going to re-accelerate growth, you smile politely because it is so rare. But if you're just following Jack on Twitter, it's as if Airwallex is defying gravity at your scale to be re-accelerating. Our AR is growing like 100 million every quarter. So what does that come down to? Has that been like, can you just zoom in on some of the magic? Well, first of all, it must mean that we've done something right. And I think that's for sure. We've really built something that's scalable. So, you know, we, for the first couple of years of our works, we're so focused on building in the infrastructure and the foundation of our growth.

3:59and for a while it seems like we're doing all this investment into something that doesn't translate into business numbers really quickly but over time it's just accelerated and our investment really paid off and at the end of the day we're seeing how we are almost staying ahead of customer demand as well so you know making the choice of building the end-to-end platform and not just uh double down on like simple product features and applications but um so for example like in i think i remember in 2019 we spent almost all of the money we raised that year building two products at the same time which a lot of companies wouldn't do right like they maybe build one and then do the next right but um yeah traction and then build the next one but uh we knew that you know both of these products are really important to how we can scale uh so being like payment acceptance and card issuance which is either two ends of the payment cycle you know we've seen a lot of cross-selling upselling um across our platform so majority of our customers use more than two or three products on the Airworks platform.

5:22Yeah, so I think seeing how we're growing means that we've done something right in the very beginning. A couple of things stood out there. One is building two products at once. The traditional advice is just maniacal focus on the one thing and do it extremely well. How did you arrive at the decision to do two things at once? And how did you know that infrastructure was going to be such an important foundation for Airwallex's product? In reality, we're doing more than two now. Yeah, I bet. Of course. We have the resource and the money and also the business is, I guess, end of 2023, we reached cash flow positive.

6:08So we're balancing that out with how much we spend, how much we are investing into also marketing and customer acquisition and all that. But coming back to the importance of infrastructure, so I think we're going all the way back to 10 years ago where we really saw how the banks are not developing the newest products for the modern businesses. So essentially, today, anyone can start a business online fairly easily. So if I'm to start Airworks today, I have my cloud, all the SaaS, accounting software, your AI tools. It's all in place. But 10 years ago, banking was just lagging behind. And you can't imagine the time when we first started.

7:03I still had to go to the bank's counter to open accounts. I remember traveling quite extensively for two or three months just to head to the partner banks to open bank accounts physically in person. And also the bag of tokens that I still carry with me from some of our regional banking partners. Yeah. So it's all isolated regionally. It's not connected. So it's almost impossible to have a global business without, I guess, a centralized financial solution that just makes it easy for you. Like almost everyone still needs centralized end-to-end solutions, right? So I think today, if someone is to start their own business online, they can be easily global with the support of fintechs like Airwallix and all your other SaaS and different tools.

8:06And they're able to do that because we've essentially taken a very traditional legacy technology and transformed it into something that is all-in-one and you can easily use without actually much financial background. You can use Airworks without being an accountant or a finance manager. And beyond that, right now, we're building AI co-pilots to help you make these decisions decisions and help you pull out the information that you need so that anyone can actually start their business fairly easily and be global from day one i think like you mentioned 10 years ago like let's let's do a bit of a throwback um i think nikki has shared his past email who's a partner of blackbird um to jack and i think he said something along the lines of like I'm sorry Jack I'm just not interested in the the space and one of the great misses because fundamentally Airwallex's product serves customers that are global from day one or global in nature I would love to like go back to like I think I read somewhere where you said like the pitch deck was a complete joke but like you were the ultimate investor in that you dedicated your life and your time and your money to the airwell extreme and can you just sort of bring us back there and like what what did you see so i think we talked so much about like business being global but at the same time even local businesses need a better just a better financial platform right and i think what really so one is a lot of impulse involved in this decision i think For me personally, at that time, I was just so eager to start a business.

10:02I was feeling very entrepreneurial. I was a little bit sick of my day job. I think, one, finance, everyone needs it. Every business needs it. I think on the consumer side, it's still a very large portion of payment as an industry. But I think at that time, we already had a lot of the wallets, the show wallets. The user case is actually very simple. And there's a lot of competition in that. But on the business side, I mean, I didn't really know what I was getting myself into. But the more we talk to different customers, different clients, and also investors, the more problems we discover and the more user cases we see.

10:49and um so on the business side we're already seeing like online streaming and you know the gaming industry taking off like e-commerce was huge at that time whether it's exporting or but what do you really have for business right you have paypal which is built for ebay and that was you know 20 years ago so i think we didn't know all the right answers or the solutions to the problems that we were discovering. But over time, I think, one, building our own clearing network, FX engine and all that, we saw the infinite possibilities of what you can do on top of it. And we actually, at the moment, also encourage other startups to try and see what they can come up with building on top of our infra.

11:41So I think, you know, if you ask me whether I knew where we'll be like in 10 years time, probably not. I mean, just big things that happened during the last 10 years, you know, COVID, one of digitization, globalization, you know, there were a time where like during COVID, everyone just stopped globalization. Right. And went back to domestic. but after that we saw you know like actually how do you then going back to my opening bank account at the counter right how do you actually do that anymore right you can't do that but the business can't stop and which is why you know like zoom shopify and all of these online alternatives became the normal way of doing business and the normal way of operating um across different regions right so i think nowadays like even bags open uh offer like online solutions for account opening and that but it's um slightly still slightly different experience to what we offer so for example you know if i'm a singaporean australian business and today i want to start business in u.s or uk i can after onboarding with airwallis i can easily open a local u.s account with a few click of a buttons.

13:02And once that's through, you're able to collect money locally. So I think these will become the new normal way of and expectations from our customers and any business that's operating because technology is in place and there's just no reason that we go back to checks and facts and the older way of doing things. I know that the mission at the time was to give businesses like borderless money movement and like the impact of economic freedom and global entrepreneurship. Was it that clear at the time? And maybe could you share like a memory of when the clarity of the business met the reality and, oh my God, this is now working.

13:50Holy shit, what do we do? uh one of the things that we discovered that was very interesting and which was one of the reasons why we actually started airwallex was we wanted to build a platform that regardless of the size of the company they can use so it's very simple so when you go walk up to a bank you start off in SME they actually you know literally name you SME and you have limited service and you get you know like the services that the banks provide you for small business and then you move up maybe to business banking and corporate banking and institutional banking and for us we like we as a fintech we work with the transaction banking so it's very siloed almost and then you're offered different products and different platforms based on the size of your business.

14:46But in reality, successful businesses grow, right? And you should be able to receive the same product and services regardless of your size. So when we discovered that some of our really high growth and scalable clients started to utilize like more airworks products their own growth transitioned into our growth right so we have customers who were growing like 10 fold or 20 fold because their business was successful and we're still continuing our support to them and adding new product features and you know like more support to them and our business grow at the same time so i think is seeing that whether you're one person or like a multi-billion unicorn, you're able to use Airwallex.

15:38And I think that's the moment we realized we're doing it right. But in terms of marketing, it was very difficult. Like you're either labeled as an SME provider, which is, you know. Yeah, because that's how the banks were doing it, right? But then we had this like huge enterprise API API driven like a business that was also growing massively. So we did my set of putting customers in categories really need to change. And I think like technology, whether it's mobile, fintech, cloud, or AI, is really democratizing how everyone operates. And I think, yeah, and I think we are really seeing that we're a part of that really big revolution.

16:30What have you learned about growth and in particular, the truths of the last 12 months about the magic of Airwallex's growth engine? I think growth starts with solving a real problem and it has to start somewhere. And I think, you know, Airwallex was born out of our own frustration, right? when we started the cafe but it also has to be like you also your northern star has to be really far away and ambitious and for a while i i think we started in 2015 we didn't see any substantial like revenue until 2018 so for three years it was it was very difficult right i have to say like we had to throw away a product that we were building and you know we're just constantly burning money and not really seeing any solid revenue coming in.

17:28But after we've done the infrastructure and we're still building our infrastructure, but after we really double down on what we think is going to bring us in the numbers, it just took off. But staying in that trajectory is going to be very difficult after you've been growing like 100 % like every consistently every single year and we're still doing that um and that's growth coming in from all sorts of different ways right um whether it's adding new geos or it's adding new products so initially you see the growth and you're happy about it and you're like oh then after a while is like acceleration, right?

18:14The acceleration itself, it's very hard to keep. So I think we've learned that very quickly that at the core of that is people, right? So we've, you know, something that I often, you know, hear like a couple of years ago about growth is that, you know, the people actually have to grow with the business, whether you're founders or your team. Because when you're doing, you know, 100 million or 1 billion it's it's different type of business obviously i think as a smaller business it's very hard to say um i actually love the translation you just made from like the early dynamics of the initial wedge it not working out quite well it taking three years to find the product magic that spread organically and then translating that into like ultimately the company is just the the people that you hire and like for me when I think about a company I think about like the the nervous system like the beating heart of a business is its people and like how the leaders act can often reflect how the entire company acts and you just shared how the growth of the business, it's really an extension of the growth of the founding team.

19:35Can you share some of the sort of key milestones of your own personal evolution over the journey? Yeah. So I think for myself, I often make jokes about building our company's first computer, even though we have three other engineers in the founding team. Everyone was coding and then we just had these parts and I was like, okay, I know how to do that. I was like, plug everything in. So basically I did everything other than coding in the very early days. So, you know, BDE, I talk about finance, compliance, but obviously, you know, I'm not the expert of like legal and, you know, like these specialized areas.

20:24So we had to add people who are, you know, experts of these fields as we grow. And actually, funnily, every time we do a due diligence with an investor, we feel like, oh, we really need some professional help on this. Like what's this challenge is like these very structured questions that, you know, as a startup, you might not know. because we're just so focused on like building and products and all the things that you know bring in business and and and you know but whereas on the structure side you know we actually every time we did the fundraising we got we became more structured in a way so i think it's a good experience to go through as well because you become more of a you know formal company in a way but i'm talking about like pre-a series a right like you know so my personal journey has been a lot of firefighting and jumping in areas where we didn't have uh the right people or there was just a gap so whenever we come up with new ideas but we haven't hired the right person for that.

21:40Myself and the other founders always jump in to do that until we find someone who is able to lead it. But it's not just about the founders, right? We have within the global leaders team, people who wear multiple hats, who moved through leading different teams because they have the knowledge of how our company operates, as well as just really purely very smart people who are problem solvers. And I think at the end of the day, as founders, we, one, have the most knowledge about the business, but also I think it's making the really hard decisions. So for example, when we talk about what is our priority and how do we get the buy-ins of the team to think similarly to how we think.

22:33And there's just no shortcuts, right? Like I think a lot of times it's also gut feeling and just knowing that this will work. And sometimes you make mistakes and it's fine because it's going to cost you one or two months of time to realize that it's a mistake and you recognize it and then you pivot and you change and you move on. so and that's actually something that um investor told me as well is like sometimes you're so fixed up on making the right decision making everything perfect making sure that you're making the best decision for the business but people are wrong sometimes and it's perfectly fine because um we've already gone way beyond the stage of you know zero to one which is about survival we've survived and beyond that it's you know it's okay and and i think yeah and and that's something i i've learned because you know every year we have issues that you know like initially you're like oh you know i found something wrong i'm like blaming myself there's a lot of frustrations but you know you encounter bigger problems the next year so yeah so i think that's something i really learned as a founder and i'm a lot more resilient um and i think if other founders can say that as well like about whether it's market shifts or anything that the world throws at you you know 10 years we've i'd love i'd love to say we've seen it all but i don't know what is in the future yeah so we just kept going and stayed very focused very obsessed with you know what we're doing and adapt and you know the longer it is the more adaptive i became i mean one of the defining features of like an incredible founder is whether they can learn it all and like the very idea that you had multiple engineers on the team and you're building the first computer is like testament to that quality just in spades.

24:41And to extend that, like, and sort of bringing it back to the first question, Airwallex is at such a scale now. And as you said, like, you still want to operate as a startup and execute really quickly. Like, how have you structured the team so that you can execute as fast as feasibly possible and as fast as your expectations have set for the team? I think the way we still ideally want to stay reasonably flat. So we don't want way too many lines of reporting. And it's just too complicated, right? And then we want that communications to be as close as possible with the teams. And we've learned this over time, right?

25:26So we tested different structures. We've had reorgs, multiple reorgs for, I think, a duration of at least two or three years. We just kept reorgs because we wanted to figure out how to make this work. Yeah. And it comes back to building a really high-performing team, right? And one, I think we have extremely high standards when it comes to hiring. And it's something that is still constantly evolving, right? Finding the right people is always the hardest thing. but once we have that and I think we start to have very clear ownership so that you know ownership is actually one of those things that we look for when we're hiring as well so that you know people really own what they do and from the product development perspective we ask that our product managers and our product leads to actually treat their individual product as a small startup within the bigger startup, which is Airwallex.

26:28So they can think of their product as a mini version of Airwallex that they have their own business plan and it's basically what you see as an investor, but a smaller chunk of bigger picture. And so not only we look for individual contributors, but we also look for people who can collaborate and really own what they do. And so ownership is clear. So decisions become a lot faster. And I think we try to remove, also remove as much friction as possible when it comes to like, so we, at least my team has very clear rules about like meetings. So we try to keep it short and then we just try to have as much preparation as we do when it comes to, you know, like, so we used to have like these weekly meetings and management meetings and then like, you know, and then it just became a little bit too much.

27:34So we started structuring these a lot better. So different channels of communication, you know, using Confluence and using Slack. Yeah. So I think these things really help us to stay you know fast and have that momentum and we've also um encouraged people to have like data-led decision making um and this started years ago right um so we try to instrument everything and then you know and not wait for like research or like you know like those we'll just try to keep everything live because everything is changing very fast within airwallex every day and we want to keep the teams informed and um yeah so i think things like that really helped us to stay linked i mean we have 1800 people but if you think about the scale that we operate at that's it's it's not a lot of people right like i've seen a lot bigger companies who operate a lot less efficient.

28:39I even made this joke to a bank CEO about doing the same things as him, but with like 5 % of their workforce. But so yeah, we try to automate as much as we can while staying embedded. So it's not scattered, like information is not scattered across different platforms. Minimize the hands-offs and really maximize the efficiency of the company. It's interesting that the archetype of person that you hire and the way that you communicate and the cultural values are the things that drive efficiency. And how does it work across offices, across cultures, across personalities? What have you learned about ensuring that you have a flat organization that is also fundamentally very global?

29:31So again, it starts all the way from hiring, right? If you have the right person doing the right job, you're already halfway to your successful team. So that said, it's extremely difficult to keep your hiring consistent across different GOs, across different teams. and as you get bigger and you know sometimes you know balancing like how quickly i want the person as to you know you maybe i'm just waiting for unicorn to turn up right but having the right person just fundamentally makes so much difference to how we perform as a team that you know it's totally worth it like sometimes we've all done it before right like just hiring for the sake of hiring but then realizing you're not really you know deep down you know that's not the right person and even if sometimes you think oh i found a unicorn they come into the business and you still think you know like two or three months down the track and you're like oh it's completely different um we imagine that to be so one is definitely starting off with making sure that you've done your hiring right and we're very so we came up with our back in the days we had you know like every company we had like this mission statement we had like the culture and it all starts with customer first then you know like and all that but what we've learned like and we what we came up with a couple years ago is basically called operating principles and we basically give people guidelines as to what it actually means to work at air wallets and we look for people who are aligned with these operating principles and it goes into our reviews it constantly remind ourselves of what it actually means to be a part of our team and so starting off with hiring we you know these personality traits will definitely help bringing the right people and of course the different geos we we tend to see that people who are who moved around quite a bit are do really well at airwallets so people who lived in different regions studied in different regions coming from different backgrounds um there's a lot more flexible and they embrace the changes a lot better and so i think for a while we were like the employer of choice for expats living in china It was really interesting because all of these Mandarin-speaking Europeans and U.S.

32:21students were looking for global companies to look for. So it was very interesting in a way that they have similar backgrounds and they want to really work on this. And so internal referrals also became a big thing at Wallach. So we had one person joining maybe from a company or a school, and then they just keep on bringing their friends who are like-minded. And that's across different offices as well. So it's not just, you know, Shanghai that had, you know, flood of expats, but also like Singapore being like a very diverse and like global city and country. Similarly, Australia as well, right?

33:03when we only had Australia, even back then, we were so culturally diverse. It was very cool in a way because I think Australia also had a big migration wave about 10 years ago where a lot of engineers relocated from like US or Europe. So I think diversity is something that just happens so naturally at Airwallex. It's really funny. and it's just people is one of the constantly remains the top reason of why people like to work at Airwallis. So work with really smart and interesting people. And I think that's for the past, I don't know, 10, 20 engagement surveys that we've done, that was the number one reason.

33:54so i think even now like because you're you have like these people who are really passionate about what we do the people they hire will also be you know just culturally diverse and very interesting and very passionate and smart what's a hiring or cultural principle that is unique to where looks that if i was to put that inside another company it might not work or maybe disagree with so one thing that we've learned is if you have a really smart person doing anything it's likely to succeed so i think we emphasize a lot on intellectual curiosity and just pure smartness and i think i mean obviously you know everyone wants smart people working for them right but i I think even more so here because we've had people who are not from necessary, like on paper, on CV, they've had done nothing related to the job that actually they are going into.

35:05And we've consistently found that successful, especially in project management and product management, as well as, you know, we had a team called strategy. that is non-existent anymore because we realize that it's more important for them to be part of the business. So now we have strategy ops, revenue ops. So they are a lot more involved in the business as opposed to just coming up with strategy, right? So yeah, I think these are some things that we've learned over time and we found to be successful and working for us. And which means a lot of rejection in offers often happen because, you know, people might say, oh, you know, they've done it before.

35:53But then because what we're building is also so new and different, it doesn't mean that past experience translating to future success. So instead, we just look for people who can quickly learn. Like you said, you know, like founders are extremely fast learners. We just want people who can learn what we do and build on top of that, as opposed to taking their past experience and just plugging into what we're doing at the moment. I love that. Do you have any lessons on launching into a new country or launching an office in a new country? I think initially it's very daunting and very scary. There's a lot of navigation around like regulators and like business and but i think consistently we also found that to be extremely straightforward these days because i think it comes back to what problem you're solving and that's consistent across all of your customers and whether regardless where they are but um we've also learned that the best product market fit is a combination of product in market so what is really successful as an initial launch in one market is not the same as another market but because we have this whole suite of different products the hook is is basically you need to find the hook and for example like in markets where we have a lot of offline to online businesses and e-commerce customers, business account is extremely important because for them to collect money, you know, collect money is number one.

37:42And then also to make payments to suppliers. And so modern currency is something that's very important. But in some of the countries, for example, US, then maybe like modern currency is not something that is on the top of your list because U.S. is a dominating currency and it's accepted in a lot of places. But for a business in the U.S. that's trying to enter new markets, maybe like local payment collection, like wallet connections and card. And so that becomes very important. So the first product that you sell in different markets is quite different. so then that translates into marketing strategies and how you do your customer acquisition right so number one is always getting the regulating regulations right so i think there are always similarities between how regulated regulators think so on the in on the payment side top priority is always antimony laundering, right?

38:52Making sure that the services that you provide is safe and secure and you're protecting yourself as well as the other players in the market, as well as the customers. And that is the same across different markets regardless of where you're going. And beyond that, then it's, you know, what value you actually add to the local economy. Once we've done the first couple of licenses, we found that commonality. So once we're going to another market, we can present similar cases and convince that the regulations also issue us a license. And after that, it's market launches. So like I said, finding the hook and getting the first product right, and then try to do cross-sell and up-sell.

39:38And then it's just like a snowball, right? And you just keep rolling. What does it mean to get a product right? How do you measure success? and yeah how do you keep close to the customer as a financial product i'd love to just understand like what does product market fit when you launch into a either a new market or a new product first thing is don't compensate on the differences because you're going into different markets i think people tend to think too much about like localization and you know like how to make sure that you have the right product for the right market. And you're always able to find a lot of commonalities regardless of where you're going because people's pain points and the problem you're solving is the same.

40:25You solve it maybe a little bit different, but how business operate and how people grow their business is the same. So I think one thing I'll share is like, people think that we're really selling to finance managers and people who operate finance. That's not true. because especially in a lot of the tech companies that we work with, the CTO actually makes the decision. Similarly, like my co-founder's Cigling actually makes the decision on what tech platforms we use, not our finance manager, right? Like they may say, oh, you know, this is the accounting software we want to use. This is the expense management software that we want to use.

41:04But if we are to add that to our tech stack or the IT actually gets a say on whether it's secure, whether it's the best product for us. And so the stakeholder is not necessarily who you may think you're actually talking to. So the most important thing I think is staying true to what actually you are building. So we end up doing a lot of consulting services for some of our customers as well, because we're like, Like this is the way you should build your product for the maximum efficiency. And, you know, we've seen it across different markets. We've seen it with different clients in your similar industry.