Jakarta-based Xendit, a payments infrastructure company operating in Indonesia and the Philippines, has raised a $300 million Series D led by New York-based growth equity investors Coatue and Insight Partners.
Only nine months earlier, the company announced its $150 million Series C funding led by Tiger Global Management at a billion-dollar valuation.
And six months earlier, Accel led the company’s Series B of $64.6 million.
The valuation for the latest funding has not been disclosed.
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Existing investors who participated include prior leads Accel, Tiger Global and Kleiner Perkins (who led the Series A), as well as EV Growth, Amasia, Intudo Ventures and Twitch founder and ex-Y Combinator partner Justin Kan’s Goat Capital.
“We help merchants all over the region accept payments, send payments and then also hold funds” said Lo. “We’ve often been called Stripe for Southeast Asia.”
A generation of entrepreneurs “can launch businesses at scale with hundreds of thousands of users in a couple of days,” a real situation a customer faced, said Lo.
In 2022, Xendit is on track to process $15 billion in payment value, showing more than 100 percent growth from 2021 at $6.5 billion, according to the company.
The company, which started out in Bitcoin remittance payments, was one of the first companies from Southeast Asia to join Y Combinator in 2015. (It made the Top100 YC list in 2021.)
Whilst at YC it pivoted to peer-to-peer payments, a consumer Venmo-type service.
However, the service hit a roadblock. “There was no way for dispersing money, sending out money at scale 24/7, sending unlimited amounts to any bank account,” said Lo. “We take that for granted in the U.S., but that didn’t exist in Indonesia.”
The company built its own payment infrastructure, partnering with banks.
In 2016 Xendit held a mini hackathon.
“We released some APIs and we’ve had customers on this kind of payments infrastructure ever since” said Lo on the company’s accidental journey to becoming a payment infrastructure company.
Some companies underestimate “how important it is to understand payment behaviors in the market to be able to succeed,” said Wijaya. In Indonesia and the Philippines, credit card penetration is extremely low, around 3 percent. Most payments are done via bank transfers which is very cumbersome.
“If a thousand people send you $10 for your stickers that you’re selling, it’s hard to reconcile. So we brought to market this idea of a virtual account where it’s a unique identifier,” said Lo. The ability to reconcile payments proved extremely popular with merchants.
In 2020, Xendit launched in the Philippines, its second market.“We built something that didn’t exist. We built direct debit with Grab ride-sharing as a first customer,” Lo said of the company’s intention to not just replicate what exists in a market, but to bring something new.
Southeast Asia has some of the fastest-growing economies along with a younger tech savvy population.
Xendit’s customers include fintech startups in the lending, remittance and crypto sectors as well as enterprise SaaS, e-commerce and logistics. Customers include Grab, Wise, Traveloka, Samsung Indonesia and ShopBack, in addition to Indonesia’s national post office and national airline, Tiket. Next it plans to expand support of not only large and technology-focused companies, but small businesses as well.
The company also is planning to expand its markets to Thailand, Malaysia and Vietnam.
Illustration: Dom Guzman
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