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payfazz.com

Founded Year

2016

Stage

Series B | Alive

Total Raised

$74.52M

Last Raised

$53M | 2 yrs ago

About Payfazz

Payfazz is a financial technology development company developing a modern wallet aimed at simplifying payment management for users.

Payfazz Headquarter Location

Jalan Dr Ide Anak Agung Gde Agung Setiabudi

Jakarta, 12950,

Indonesia

021-5011-2000

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Expert Collections containing Payfazz

Expert Collections are analyst-curated lists that highlight the companies you need to know in the most important technology spaces.

Payfazz is included in 3 Expert Collections, including Payments.

P

Payments

2,148 items

Companies and startups in this collection enable consumers, businesses, and governments to pay each other - online and at the physical point-of-sale.

F

Fintech

3,101 items

F

Fintech 250

250 items

250 of the top fintech companies transforming financial services

Latest Payfazz News

Indonesia’s innovative startups are the catalyst for increasing investment

Feb 22, 2022

The first is geographic disconnectivity. Indonesia’s population of 273 million is spread across 6,000 habitable islands, and maintaining logistical and operational integrity over long distances remains a key issue for local businesses. This has resulted in significant price disparity across the regions , with prices of consumer goods higher in satellite tier-2 and tier-3 cities and rural areas. To keep retail prices low, social commerce startups Super and Evermos are taking a “hyperlocal” approach to connecting brands with resellers in tier-2 cities. Both startups operate networks of warehouses and customer support via social media to manage orders in batches, which eliminates the need for resellers to incur high inventory costs, while enabling sales to be managed with flexibility. Notably, Evermos opts to focus on halal-focused products, allowing the company to control the quality and authenticity of its products while meeting the needs of Indonesia’s Muslims, who form 90% of the country’s population. At the same time, this overcomes the issue of distrust of e-commerce that stems from the proliferation of fake products. The second issue is financial disconnectivity. The country has a national bank account ownership rate that is under 50% , which creates a disconnect between digital services, merchants, and consumers. This disadvantages the latter, as they are unable to afford big-ticket items or to benefit from traditional financial services. Payfazz , the first Indonesian alumnus of Y Combinator’s accelerator program, aims to provide formal financial services to unbanked consumers. The fintech startup provides an agent-based payment and banking solution for unbanked Indonesians, and offers services for routine tasks such as bill payments and loans. Recognizing that as many as 95% of Indonesians opt to conduct daily transactions offline through warung, which are family-owned street stalls that double as social hubs, Payfazz uses the micro businesses to function as agents to introduce direct digital banking services to consumers. With a recent Series B fundraising round of USD 74.1 million, Payfazz is on track to scale beyond its current portfolio of 50 million consumers and 5 million agents. Another solution favored by unbanked Indonesians is through “ buy now, pay later ” (BNPL) services. According to a recent report by DSInnovate , BNPL is the second most used fintech product in Indonesia, with an adoption rate of 72.5%. A rising startup in this sector is Akulaku , which was founded in 2016 and manages annual transactions of over USD 1.5 billion. The company offers a range of interest-free installment products to make big-ticket items affordable for Indonesians who don’t have access to conventional bank loans or credit. Another BNPL provider is MyRobin.id , a startup that has developed a workforce-as-a-service marketplace aimed at facilitating access to employment opportunities and financial services for blue-collar workers. MyRobin’s holistic suite of products and embedded financial services has drawn more than 2.8 million workers and 250 enterprises into its network, within which BNPL forms a crucial component in offering liquidity for the unbanked. Indonesia’s new wave of startups are filling the gaps by solving the problem of high distribution costs, as well as providing access to goods and financial services. Investors are also recognizing the necessity and value of this approach. In 2021, the three most funded startup verticals in Indonesia were fintech, logistics, and e-commerce. Growing domestic venture funding options The growth of startups and venture capital financing are intricately tied. In Indonesia, the emergence of its startup scene over the past four to five years is matched by the rise of domestic funds. With 129 local VC funds as of 2021 , Indonesia has the second largest VC market in Southeast Asia behind Singapore. Notable VC growth spurts include AC Ventures, which brought in USD 205 million during fundraising for its Fund II in 2021—double its original target. Another is Alpha JWC, an early-stage VC firm that secured USD 433 million for its third fund last year. Given the sizable growth opportunity of Indonesian startups, local VCs are leveraging their familiarity with the market to gain an edge when it comes to investing domestically. In 2020, East Ventures , one of the longest-serving Indonesia-based seed investors, held a portfolio of 300 startups, with 170 based in Indonesia. Homegrown startups are benefiting from the ease of access to capital and expertise within the country, unlike a decade ago when they had to look for funding abroad. However, like the region on the whole, Indonesia lacks a deep VC base with experience in closing late-stage funding . The larger local funds are oriented towards seed and early-stage funding while foreign investors snag firms that eventually become decacorns and unicorns . There is also a regulatory squeeze on smaller funds that focus on pre-seed rounds, as the USD 3.4 million minimum capital requirement mandated by the OJK in 2021 puts half of all existing Indonesian VCs at risk of failing to comply. As such, Indonesian startups find themselves in a difficult position when sourcing local venture funds. The upside is that the government and agent investors are stepping in to fill in the gaps in late and pre-seed funding, respectively. In December 2021, President Joko Widodo announced the launch of the Merah Putih Fund (MPF) , a state-owned enterprise-backed venture fund, to supercharge the growth of local “soonicorns” with a valuation of over USD 200 million by providing sizable checks of USD 10–50 million. Similarly, angel investment networks are on the rise as Indonesian founders seek to “pay it forward” by offering early-stage startups flexible catalytic capital. Kenangan Fund (created by the co-founders of Kopi Kenangan) and Prasetia Investment (created by the co-CEOs of Prasetia Dwidharma) pools capital from angels to back its professional investment vehicle. These funds offer faster and more flexible deals than VCs to pre-seed startups and are capable of writing checks as high as USD 100,000 to cover a wide range of funding needs. A more recent entrant is Tunnelerate , a seed-stage venture fund and accelerator which draws on founders turned angel investors to provide the capital and expertise to support fintech, agritech, and healthtech founders in tier-2 and tier-3 regions. Two-way innovation Beyond supporting startups solely for returns on investments, large backers such as the government, conglomerates, and SOEs are recognizing startups as partners, tapping their tools and creativity to transform their own operations and resolve internal pain points. PT Pertamina, an Indonesian oil and natural gas SOE, launched the Pertamina XScouts open innovation program in 2021. The program supports energy startups with innovative technology application and market expansion, eventually integrating their products into Pertamina’s energy transition process. While cross-pollination with corporations indicates a maturing startup ecosystem, another promising trend is that non-unicorn Indonesian startups are turning to mergers and acquisitions to expand their suite of products to complement their organic growth. Sirclo , one of Indonesia’s largest e-commerce enablers, merged with Icube in 2020 to integrate the latter’s technological services into its core operations. A year later, it acquired Orami , Indonesia’s largest parent-focused e-commerce and information portal, and just this month, it announced that it had acquired Warung Pintar to expand its reach to the warung segment. Between 2020 and 2021, the number of M&As in Southeast Asia rose by 114% , largely driven by Indonesian enterprises. The future for Indonesia’s startup ecosystem looks promising, though it may not yet be comparable to more mature markets such as the United States, China, and European countries. As attractive as IPO exits might be to venture investors, the reality is that only 2.7% of all exits in Indonesia between 2015 and 2020 were done via IPOs. This is unlikely to change significantly, given the risks associated with startups in terms of profitability, as well as a lack of strong late-stage local VC firms. Nevertheless, Indonesian startups are emerging as significant innovation players, backed by a vibrant ecosystem keen on sustaining entrepreneurship as a driving force of the mainstream economy. About the authors: This article is co-authored by Richard Mackender, Tan Shuo Yan, and Chan Shawn Kit. Richard Mackender leads the Deloitte Southeast Asia Innovation team, a cross-function, cross-country unit dedicated to driving innovation as a long-term value creator across Deloitte’s Southeast Asia operations. Tan Shuo Yan and Chan Shawn Kit are members of the team. Share

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  • When was Payfazz founded?

    Payfazz was founded in 2016.

  • Where is Payfazz's headquarters?

    Payfazz's headquarters is located at Jalan Dr Ide Anak Agung Gde Agung, Jakarta.

  • What is Payfazz's latest funding round?

    Payfazz's latest funding round is Series B.

  • How much did Payfazz raise?

    Payfazz raised a total of $74.52M.

  • Who are the investors of Payfazz?

    Investors of Payfazz include Tiger Global Management, Y Combinator, B Capital Group, Insignia Ventures Partners, Quiet Capital and 5 more.

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