Xendit, a payments infrastructure platform for Southeast Asia, has raised $300 million in fresh funding. The company’s new valuation wasn’t disclosed, but it hit unicorn status in its last round of funding in September 2021. The new round brings its total raised to $538 million and was led by Coatue and Insight Partners, with participation from Accel, Tiger Global, Kleiner Perkins, EV Growth, Amasia, Intudo and Goat Capital.
Part of the funding will be used to expand into new markets, like Thailand, Malaysia and Vietnam. The company, which bills itself as “the Stripe of Southeast Asia,” also plans to add value-added services in addition to payments, like working capital loans. Xendit now has more than 3,000 customers, including Samsung Indonesia, GrabPay, Ninja Van Philippines, Qoala, Unicef Indonesia, Cashalo and Shopback.
The company says that over the last year, it grew annualized transactions from 65 million to 200 million, and increased total payments value from $6.5 billion to $15 billion. Xendit has made several strategic investments in companies that serve startups and SMEs, including private bank Bank Sahabat Sampoerna in Indonesia and payment gateway Dragonpay in the Philippines.
Xendit was founded in 2015 by chief executive officer Moses Lo and chief operating officer Tessa Wijaya.
For people who aren’t familiar with Southeast Asia’s fragmented payments landscape and the challenges its poses for businesses, Wijaya explained that “while the U.S. builds everything around credit cards, you just cannot do that in Southeast Asia. Credit card penetration is extremely low especially in countries like Indonesia, so we have to help merchants offer alternative payment methods.”
She added that before using Xendit, merchants who wanted to accept and send payments would first need to contact banks and other partners to integrate with them. Many small businesses, however, do not have the time or resources to do that. Xendit solves that problem by aggregating payment options for merchants.
“From the consumer perspective, let’s look at a specific example. In the U.S., if you enjoy ‘Game of Thrones’ like I do, you can pay for a recurring subscription on HBO online by entering your credit card information just once,” Wijaya said. “In Indonesia, if you subscribe to HBO, the experience is extremely high-friction. HBO thought that in markets where cards don’t exist, the way to go was to pay through your telco provider. For me, the consumer, this means I have to go to my telco app, wait 10 seconds for it to load, find HBO amongst many other products, pre-purchase a 30-day plan and repeat every month.”
This friction means lost business for companies. Xendit solves this problem by integrating payment options for merchants.
“Before Xendit entered the scene, payments infrastructure was disjointed and provided no reliable way for SMEs and startups to connect with customers,” said Lo. “Since payments are a foundational part of any business, you can’t create a seamless experience without addressing payment issues first.”