Once close enough for an acquisition, Stripe and Airwallex are now going after each other

At the tender age of 34, just three and a half years into the demanding journey of building a startup, Jack Zhang found himself in a pivotal moment, seated across from one of Silicon Valley’s most formidable investors, Michael Moritz of Sequoia Capital. The setting was Moritz’s expansive San Francisco home, a residence boasting multiple floors and an unobstructed panorama stretching to the iconic Golden Gate Bridge – a backdrop for a compelling proposition: the sale of Airwallex.

Stripe, the payments behemoth, had tabled an offer to acquire Airwallex for a staggering $1.2 billion. This was in 2018, a time when the nascent Melbourne-based company was generating approximately $2 million in annualized revenue. The financial metrics were undeniably seductive: a revenue multiple approaching 600 times, a figure almost unheard of in the industry. Patrick Collison, Stripe’s co-founder, Moritz argued, was a generational founder, and a merger would allow Airwallex’s trajectory to "compound" into something truly extraordinary. Zhang listened intently, absorbing the weight of the proposal. For two weeks, he found himself in a restless trance, pacing the streets of San Francisco, the enormity of the decision clouding his thoughts. In a moment of intense pressure, he verbally assented to the deal.

A Transcontinental Reckoning: The Decision to Persist

However, the journey back home, an almost 8,000-mile flight across continents, provided Zhang with the crucial space for introspection. Speaking recently from overseas, he recounted the profound self-reflection that ensued. "I really went deep on what motivates me to build Airwallex," Zhang explained. "I was three and a half years into the business. The business was growing 100 times in 2018. And I only just sort of tasted what it [was like] to be an entrepreneur. And that’s what I’d been dreaming about." The dream, it seemed, was more potent than the immediate allure of a billion-dollar exit.

Adding to his conviction, two of his three co-founders had voiced their opposition to the acquisition, providing a critical external validation for his burgeoning resolve. Yet, the clearest signal, Zhang recalled, came from the simple act of looking at the whiteboard in his office. The foundational vision for Airwallex remained etched there, still largely unfinished: to construct the global financial infrastructure that would empower any business to operate seamlessly anywhere in the world, as if it were a local entity. This unwavering commitment to a grander, unfulfilled ambition ultimately led him to retract his initial acceptance and choose the more arduous path of independent growth.

That audacious decision, made against the backdrop of immense financial temptation, now appears remarkably prescient. Airwallex currently boasts more than $1.3 billion in annualized revenue, demonstrating an impressive 85% year-over-year growth rate. The platform processes nearly $300 billion in annualized transaction volume, a testament to its expanding reach and operational scale. None of this remarkable progress, Zhang emphasizes, has come easily – a reality he frames as integral to the company’s very ethos and its enduring strength.

The Formative Years: Resilience Forged in Adversity

Zhang’s conviction to build and endure runs far deeper than mere business strategy; it is rooted in a deeply personal narrative of resilience and overcoming adversity. He grew up in Qingdao, a bustling port city in northeastern China, before embarking on a transformative journey at the age of 15. He moved to Melbourne, Australia, without his parents, grappling with a nascent grasp of English and navigating life with a host family. The challenges mounted when his family’s finances unexpectedly collapsed, forcing Zhang to shoulder significant responsibilities.

According to an account in the Australian Financial Review, he took on an astonishing four jobs simultaneously to finance his computer science degree at the University of Melbourne. His work history during this period painted a vivid picture of his determination: bartending, washing dishes, working grueling graveyard shifts at a gas station, and even picking lemons on a farm during school holidays – a physically demanding task he has often cited as the hardest job he ever had. These formative experiences instilled in him a profound work ethic and an intimate understanding of financial struggle, shaping his entrepreneurial spirit. After graduating, he spent years writing trading code in the front office of an Australian investment bank, a role that, while lucrative, never offered the "deeply fulfilling" sense of purpose he craved.

Before the genesis of Airwallex, Zhang was a serial entrepreneur, driven by an insatiable curiosity and a willingness to experiment. His ventures spanned a diverse array of industries, beginning with a magazine he started at the remarkably young age of 14. This was followed by a real estate development company, import-export operations dealing in Australian wine and olive oil to Asia, and textiles flowing in the opposite direction. He even ventured into the food industry, establishing a burger chain. These varied experiences, though not all wildly successful, provided a crucial learning ground, refining his business acumen and deepening his understanding of global commerce.

The Inception of Airwallex: Solving a Global Pain Point

The specific idea that would eventually crystallize into Airwallex emerged while Zhang was running a Melbourne coffee shop. It was during this period that his co-founder, Max Li, encountered firsthand the exasperating inefficiencies of international payments. Li frequently struggled to pay coffee bean suppliers located in Brazil, Indonesia, and Guatemala. Payments would inexplicably disappear into the labyrinthine correspondent banking systems, often flagged and frozen by American intermediary banks enforcing OFAC sanctions rules, sometimes only to bounce back weeks later, delayed and frustrating.

"That pushed me to really look at how correspondent banking works," Zhang recounted, detailing the catalyst for his venture. He delved into the intricacies of the SWIFT network – the Society for Worldwide Interbank Financial Telecommunication – which underpins much of global financial messaging. His goal was ambitious: "how we could build our own global money movement network" that bypassed these archaic and inefficient systems. This vision was not merely about faster payments; it was about creating a transparent, efficient, and accessible financial rail for businesses operating across borders.

The "Path of Maximum Resistance": A Strategic Moat

This foundational idea, born from the frustrations of a small coffee shop, has since scaled up considerably. Airwallex now holds close to 90 financial licenses across approximately 50 markets worldwide. This deep regulatory penetration stands in stark contrast to many of its competitors, with Zhang estimating that Stripe, for instance, possesses roughly half that number at best. Acquiring these licenses has been an immensely time-consuming and capital-intensive endeavor. In Japan alone, the rigorous process spanned seven years. In some challenging emerging markets, the company resorted to acquiring dormant "shell companies" whose crucial licenses were no longer being issued by central banks, subsequently undertaking the complex task of entirely rebuilding the underlying technology infrastructure.

Zhang vividly illustrates the complexity: "You can’t really vibe-code an integration with Mexico’s central bank. We have to have a secure room – you have to do a biometric scan just to walk in to access the central bank integration." This meticulous, often arduous approach to regulatory compliance and local integration is not mere "regulatory window dressing." It forms the bedrock of Airwallex’s unique competitive advantage.

In markets like Japan, for example, competitors such as Stripe and Square are permitted to process payments, but they are typically required to immediately transfer those funds out to the merchant’s conventional bank account. Airwallex, armed with its comprehensive fund transfer operator license, possesses the critical ability to hold those funds within its own ecosystem. This fundamental difference means an Airwallex customer can seamlessly issue local bank accounts, issue payment cards, and spend money without the funds ever needing to leave the secure Airwallex platform.

The foreign exchange economics alone offer substantial benefits. A U.S. merchant settling transactions in Australian dollars, for instance, can entirely avoid the typical 2% to 3% conversion fees that processors like Stripe often charge to repatriate funds back into U.S. dollars. Furthermore, by holding local balances, these businesses can pay local vendors, run payroll, and cover digital marketing expenses directly at advantageous interbank rates. "You don’t really operate like a U.S. company anymore," Zhang explains. "You operate like a company with entities around the world, but without needing to physically set up those entities." Airwallex effectively provides a virtual global financial presence.

This deliberate, slow-burn approach, which Zhang frequently refers to as the "path of maximum resistance," has been a cornerstone of his strategy. Every single license secured, every bank integration painstakingly forged, every local payment rail meticulously assembled has contributed to creating a deep, resilient layer of infrastructure that makes it incredibly challenging for competitors to replicate. "It took us six and a half years to get to $100 million in annual recurring revenue," Zhang revealed. "But after that, it took just over three years to get to a billion." This exponential acceleration underscores the power of a deeply embedded, foundational infrastructure.

The Competitive Landscape: Infrastructure vs. Integration

The competitive logic, as articulated by Zhang, boils down to a fundamental distinction: owning the infrastructure versus merely building on top of someone else’s. If a company does not control the entire end-to-end payment workflow, and an issue arises, it lacks the ability to access the underlying data necessary to diagnose the problem and explain it effectively to its customer. Furthermore, extending new products and services cleanly on top of another company’s technology stack proves inherently difficult and often clunky. "Building on top of other infrastructure," Zhang contends, "is simply not scalable." Airwallex’s strategy ensures full control and flexibility, enabling faster innovation and a superior customer experience.

For the majority of their respective histories, Airwallex and Stripe have largely operated in distinct geographical regions, catering to different customer segments. Airwallex primarily focused on Australia and Southeast Asia, while Stripe solidified its dominance in the U.S. and Europe. However, this dynamic is rapidly shifting. As Stripe increasingly pushes into international markets and Airwallex makes its strategic initial moves into the lucrative United States market, the overlap in their competitive spheres is growing, setting the stage for more direct confrontation.

Historically, Airwallex’s primary customer acquisition target has been the CFO’s office in established markets like Australia and Southeast Asia – finance directors, treasury teams, and other corporate financial decision-makers. This necessitated a different sales motion compared to Stripe, whose formidable customer acquisition engine has largely been driven by U.S. developers seeking a default, user-friendly starting point for new company payment integrations. More than 90% of Airwallex customers initially adopt a business account product, with additional services like payments and spend management following subsequently. Zhang notes that over half of Airwallex’s customer base now utilizes multiple products, indicating strong platform stickiness and cross-selling success.

Challenges and the Brand Gap

Despite its impressive trajectory, Zhang does not shy away from acknowledging the significant challenges that lie ahead. Perhaps the most formidable is Stripe’s entrenched position as Silicon Valley’s "golden child," its privately held shares having generated considerable wealth across the tech industry, burnishing its reputation and brand cachet. This leads to an accompanying "brand gap" that Airwallex must endeavor to close. Airwallex needs to embed itself deeply within the consciousness of engineers and developers – not just finance teams – ensuring that founders instinctively reach for its solutions when building new ventures. "Our brand is just not there yet," Zhang admits candidly. "That’s a harder competition to win." Building brand awareness and developer affinity in a crowded market will require significant investment and strategic marketing.

This escalating competition between two FinTech powerhouses is being observed with keen interest from various vantage points. Sequoia Capital, a major player in global venture capital, was an early backer of Airwallex – though the investment was sourced through Sequoia Capital China, which has since spun out and rebranded as Hongshan. Sequoia remains one of Airwallex’s largest shareholders, creating an interesting dynamic. Furthermore, the investment firm Greenoaks Capital holds stakes in both Airwallex and Stripe, highlighting the broad market confidence in the global payments sector.

Zhang, however, dismisses any suggestion of awkwardness stemming from these overlapping cap tables. Investors, he pragmatically notes, are ultimately betting on the sheer size and growth potential of the overall market, which is large enough to accommodate multiple successful players.

Nevertheless, the valuation question remains a pertinent point of comparison. Stripe was recently valued at an eye-watering $159 billion in a February tender offer, marking a 74% increase from the previous year, after processing a colossal $1.9 trillion in total payment volume in 2025. Airwallex, by contrast, was assigned an $8 billion valuation in December, placing it at roughly a twentieth of Stripe’s valuation. However, Zhang points out a critical discrepancy: Stripe’s payment volume is approximately six times Airwallex’s, not 20 times. With its robust 85% annual growth rate and projections to reach $2 billion in revenue within the next year, Airwallex appears to be closing the revenue gap at a faster pace than the current valuation gap might suggest.

Whether the broader market eventually recognizes and re-rates Airwallex’s valuation in line with its underlying performance remains an open question – one that a potential initial public offering (IPO), which Zhang estimates is still three to five years away, would undoubtedly force into the open.

Looking Ahead: AI, Growth, and Global Dominance

In the interim, Zhang remains steadfastly focused on longer-horizon targets and strategic initiatives. His ambitious vision includes reaching one million customers by 2030, achieving an annual revenue of $20 billion, and significantly increasing the average revenue per customer from its current range of $12,000 to $13,000 to approximately $20,000. A critical component of this future growth strategy is the ongoing rollout of a suite of AI-powered autonomous finance products. These intelligent agents are designed to go beyond merely surfacing data; they are capable of actually executing transactions and automating complex financial processes.

Zhang’s thesis is that Airwallex’s decade-long accumulation of rich financial data across the entire corporate finance stack – encompassing everything from revenue collection and treasury management to vendor payments and expense tracking – has created an unparalleled training set for AI models. This proprietary data, he suggests, represents a formidable competitive advantage that no rival can easily replicate overnight. It positions Airwallex to offer predictive insights and automated financial operations that could redefine how businesses manage their global finances.

The stage is now set for a compelling showdown. The ultimate test will be whether all this painstaking hard work, strategic patience, and technological innovation are sufficient to meaningfully eat into Stripe’s formidable market share. For the time being, the competition between these two FinTech giants appears to be playing out with a degree of reserved distance. Zhang and Collison, while never close friends, were notably friendly during the merger talks years ago. However, a recent encounter at Greenoaks Capital’s annual gathering last year saw them both present, but without exchanging words – a silent testament to the evolving, and increasingly direct, rivalry between their respective empires.