Featured Article

Indonesian payments infra startup Xendit raises $64.6M in Accel-led Series B

The fintech was the first Indonesian company to go through Y Combinator’s accelerator program

Comment

Image Credits: Xendit / Xendit

Fueled by the COVID-19 pandemic, digital transformation is happening all over the world. And Southeast Asia is no exception.

Indonesia’s Xendit, a startup focused on building digital payments infrastructure for the region, has just raised $64.6 million in a Series B led by Silicon Valley heavyweight Accel. The funding brings the total amount raised by the Jakarta-based company to $88 million since its 2015.

Notably, Y Combinator also participated in the financing. In fact, Xendit is the first Indonesian company to go through Y Combinator’s accelerator program. It also was ranked No. 64 on Y Combinator’s top 100 companies (by valuation and top exits) list in January 2021

Xendit works with businesses of all sizes, processing more than 65 million transactions with $6.5 billion in payment value annually. Its website promises businesses that “with a single integration,” they can accept payments in Indonesia and the Philippines. The company describes itself as building out financial services and digital payments infrastructure “in which the next generation of Southeast Asian SaaS companies can be built on top of,” or put more simply, it aspires to be the Stripe of Southeast Asia.

Xendit has been growing exponentially since its launch — with its CAGR (compound annual growth rate) increasing annually by 700%, according to COO and co-founder Tessa Wijaya. In 2020, the company saw its customer count increase by 540%. Customers include Traveloka, TransferWise, Wish and Grab, among others. Xendit declined to reveal hard revenue figures.

It also declined to reveal its current valuation but we do know that as of October 2019, it was valued at at least $150 million – a pre-requisite for appearing on this Y Combinator liston which it ranked No. 53. 

The idea for Xendit was formed when CEO Moses Lo met his co-founders while studying at University of California, Berkeley. Shortly after, they went through Y Combinator, and launched Xendit in 2015. 

One of the company’s main benefactors was Twitch co-founder Justin Kan. According to Lo, “he happened to have some family in Indonesia, and it was also about the time when Asia was becoming more interesting for YC.”

Xendit was originally launched as a P2P payments platform before evolving into its current model.

Today, the startup aims to help businesses of all sizes seamlessly process online payments, run marketplaces, distribute payroll manage finances and detect fraud via machine learning. It aims for fast and easy integrations so that businesses can more easily accept payments digitally.

The market opportunity is there. One of the world’s most populous countries that is home to more than 270 million people — an estimated 175 million of which are internet users — Indonesia’s digital economy is expected to reach $300 billion by 2025.

Add to that a complex region that is home to 17,000 different islands and a number of regulatory and technological challenges.

“Trying to build the businesses of tomorrow on yesterday’s infrastructure is holding Southeast Asia’s businesses back,” Lo said.

The global shift toward more digital transactions over the past year led to increased demand for Xendit’s infrastructure and services, according to Wijaya. To meet that demand, the company doubled its employee headcount to over 350 currently.

The pandemic also led to Xendit branching out. Prior to 2020, many of the company’s customers were large travel companies. So the first few months of the year, the startup’s business was hit hard. But increased demand paved the way for Xendit to expand into new sectors, such as retail, gaming and other digital products.

Looking ahead, the startup plans to use its new capital to scale its digital payments infrastructure “quickly” with the goal of providing millions of small and medium-sized businesses across Southeast Asia with “an on-ramp to the digital economy.” It is also eyeing other markets. Xendit recently expanded into the Philippines and also is considering other countries in Southeast Asia, such as Thailand, Vietnam, Malaysia and Singapore, according to Wijaya.

Xendit is also similar in scope to San Francisco-based Finix, which aims to make every software company a payments company. Xendit acknowledges the similarities, but notes it is also “looking to tackle broader challenges related to accessibility, security and reliability that are unique to Southeast Asia,” with a deep understanding of the region’s unique geographical and cultural nuances.

To Accel partner Ryan Sweeney, Xendit has “quietly” built a modern digital payments infrastructure that’s transformed how Southeast Asian businesses transact.

“Their team’s combination of deep local expertise and global ambitions means they’re uniquely positioned to do what no other company could do in the region,” he said. “The vision of Xendit is a bold one: they are building the digital payments infrastructure for Southeast Asia, and fits squarely into Accel’s global fintech thesis.”

Other fintechs that Accel has backed include Braintree/Venmo, WorldRemit,GoFundMe and Monzo, and more recently Galileo, TradeRepublic, Lydia, Public.com and Flink.

Fintech startup Finix closes on $3M in Black and Latinx investor-led SPV


Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, legal, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included in each for audience questions and discussion.

More TechCrunch

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

1 day ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

1 day ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo

Sony Music Group has sent letters to more than 700 tech companies and music streaming services to warn them not to use its music to train AI without explicit permission.…

Sony Music warns tech companies over ‘unauthorized’ use of its content to train AI

Winston Chi, Butter’s founder and CEO, told TechCrunch that “most parties, including our investors and us, are making money” from the exit.

GrubMarket buys Butter to give its food distribution tech an AI boost

The investor lawsuit is related to Bolt securing a $30 million personal loan to Ryan Breslow, which was later defaulted on.

Bolt founder Ryan Breslow wants to settle an investor lawsuit by returning $37 million worth of shares