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PAYFAZZ is the latest startup from the Indonesian fintech industry to receive a capital boost
The fintech industry in Southeast Asia is undergoing rapid transformation, with one of every two dollars in the region expected to be paid digitally by 2025, according to a study by Google, Temasek, and Bain & Company.
In Indonesia especially, where a relatively large population is seeing rising Internet penetration and smartphone connectivity, fintech is emerging as the go-to resolution for the island nation’s underbanked populace, 36% of which do not have bank accounts and a further 18% are underbanked according to the study.
To capitalize on this, a stream of investments has been flowing into the region, and Indonesian startup PAYFAZZ has been the latest to join the list of startups putting the capital to work.
PAYFAZZ has closed its US$53 million Series B round, which will be focused on driving its expansion across Southeast Asia, the fintech company announced in a statement. The funds will focused on “fintech products innovation and unbanked user base expansion,” the company told Jumpstart.
Venture capital firms B Capital Group and Insignia Ventures Partners led the round, with participation from existing backers hedge fund investors Tiger Global Management, acclaimed Silicon Valley incubator Y Combinator, private equity investor ACE & Company, and micro-venture capital investor Quiet Capital.
New investor BRI Ventures, the corporate venture arm of Indonesian commercial bank Bank Rakyat Indonesia, also joined the pool.
“We have been privileged to have supported PAYFAZZ since their early days. We believe that this path to taking their fintech ecosystem from Indonesia to the rest of the region will meet the pressing needs of many more of Southeast Asia’s digital consumers,” Founding Managing Partner of Insignia Ventures, Yinglan Tan said in the statement.
The 2016-founded fintech startup works through an agent-driven banking network and started as a digital payments platform. It currently offers bill payments, loans and offline merchant payments solutions as well.
“Southeast Asia’s population has become more familiar with the smartphone,” Co-founder and CEO, PAYFAZZ, Hendra Kwik said in the statement. “Over the past four years, we’ve provided various mobile-first fintech products to more than 40 million people. In that time, we’ve witnessed exponential growth and learned that this sector can be profitable,”
Indonesia is one of many Southeast Asian economies that are characterized by increasing Internet penetration and adoption of smartphones. It is one of the top 10 smartphone markets across the world. Further, the report by Google, Temasek, and Bain & Company found that the number of Internet users in the region grew 65% from 92 million in 2015 to 152 million in 2019.
The study also points out that while the Internet economy in Southeast asia, worth $100 billion, has grown at 33% since 2015, the Indonesian Internet economy has more than quadrupled with a growth rate of 49%.
Kwik noted in the statement that the smartphone industry could revolutionize financial services and fintech in Indonesia.
“We want to take part in this revolution by making bill payments, money transfers, loans, savings accounts and investment services easily accessible through everyone’s smartphone to accelerate financial inclusion across Southeast Asia,” he said.
Header image courtesy of PAYFAZZ
This article has been updated with responses from PAYFAZZ