Friday, March 29, 2024

Xendit snags $300-M funding, doubles down on PH market

Just a few months after its Series C funding round in September 2021, payment solutions fintech Xendit has announced it has raised another $300 million in a Series D funding round, bringing their total capital raised to $538 million.

Originally based in Indonesia, Xendit is one of the fastest-growing payment infrastructure platforms in Southeast Asia. It has enabled businesses from fledgling startups to brands like Traveloka, Transferwise, Ninjavan, and Grab to accept varied modes of payments, disburse payroll, run marketplaces, and more. The company officially launched in the Philippines in December 2020.

In the online media briefing on Friday, May 20, where it publicized the news of its latest successful funding round, Xendit Philippines CEO and managing director Yang Yang Zhang said the company is committed to the Philippines for the long run.

“With this [next] round of funding, we really think that we can empower ourselves to realize more dreams for the Philippines market as a whole, to give back to the Philippines startup ecosystem.” Zhang said.

Giving back to startups, local businesses, women, NGOs, and the Filipino community is at the forefront of Xendit’s plans for this investment.

Regarding the country’s up-and-coming startups, Xendit said it wants to increase the investment put into these businesses and guide entrepreneurs efforts to scale their brands.

Part of their support for the startups will be continuing their sponsorship programs such as the “Level Up” accelerator and the “Diskarteng Summer” program.

They are also releasing a product later this year called Zen capital. Through this product, Xendit intends to help startups find working capital funding via short-term loans.

Based on the outcome of its strategic investment with local payment gateway Dragonpay, which evolved into a mutually beneficial partnership that included cross-selling each other services and learning from best practices, Xendit also vowed to invest into other established, homegrown Filipino businesses who share their values.

Xendit said it aims to empower women by setting up educational programs for those pursuing a career in tech. Additionally, the company will be subsidizing qualified NGOs by collaborating with them directly and offering services such as fee waivers to assist their missions.

Financial inclusion is also a top priority. Using the funds it raised, Xendit said it will produce more financial products and services for all its Filipino users.

One of their innovations along these lines includes their product coming later this year, E-ORs. Digital official receipts (ORs) are currently the province of large, established businesses. With Xendit’s E-ORs, even small startups will be able to offer electronic ORs to their customers, it said.

Lastly, besides support for startups, like-minded businesses, and CSR initiatives, Xendit said it is will help fund the country’s progressive regulatory roadmaps.

The company said it will be partnering with the government on their digitization initiatives, supporting government servicing banks, and providing guidance on new innovations.

The sizeable $300-million investment was co-led by Coatue and Insight Partners with additional investment from Accel, Tiger Global, Kleiner Perkins, EV Growth, Amasia, Intudo, and Justin Kan’s Goat Capital. It is the first time that several of these investors financed businesses in Southeast Asia and the Philippines.

According to Nikhil Sachdev, managing director of Insight Partners, the region is an exciting investment opportunity because it is the fastest growing digital economy that already commands 50 percent of the world’s Internet users.

Moreover, Sachdev indicated that Insight Partners chose Xendit due to it being the leading payment gateway driving payment acceptance and processing in Southeast Asia. Sachdev attributed Xendit’s success to its product and tech-first focus, which prepared them to build a suite of products that resonates with their customers.

“We think that Xendit has a clear white space to drive a very large outcome on the back of its superior product, very large market opportunity, strong execution delivered by a best in class team,” Sachdev stated.

The success of Xendit’s products and localized scaling strategy is reflected in its growth. After it began in 2016, it has consistently reported increasing sales by more than 10% month-over-month globally. Since launching in the Philippines, the platform’s local sales have surpassed its global average with 30% month-over-month growth.

On bringing the attention of investors to the Philippines startup landscape, Zhang commented: “With investors of this caliber, what we really want to do is to focus again on being able to be that channel for investors to look at the Philippines as a core market. Not only for Xendit, but beyond.”

She added: “We really want to be that key driver for growth for the Philippines economy in the next few years. We want to promote the growth of local business, especially SMEs. We want to accelerate foreign investments into startups here on the ground. We want to ensure financial accessibility for all Filipinos. We want to double down on social responsibility.”

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