Fintech Xendit is Eyeing the MSME Market after Receiving Funding
Financial technology startup (fintech) payment gateway Xendit received series B funding of US$ 64.6 million or IDR 938 billion last month. The funding will be used by the company to target the Micro, Small, and Medium Enterprises (UMKM) market this year.
Inbound Sales Team Lead Xendit Patricia Muljadi said the company is eyeing the MSME market because of its great potential. “The sentiment of MSMEs in Indonesia is huge,” he said in a virtual press conference on Friday (23/4).
MSMEs are the largest contributor to Indonesia’s gross domestic product (GDP) of more than 60%. MSMEs employ the majority of the workforce in Indonesia. The company also recorded an increase in the number of MSMEs using its services by 140%.
Meanwhile, as a whole, up to now, Xendit’s payment infrastructure has been used by 1,500 customers from various industries, ranging from retail, fashion, the financial industry to companies providing digital products.
The increase in the number of MSMEs using Xendit’s services occurred in line with the number of MSMEs that digitized their businesses during the pandemic.
Based on data from the Central Statistics Agency (BPS), in 11 months to date, 4.7 million new MSMEs have switched to digital with a total of 12.7 million MSMEs that have gone digital.
“MSMEs want efficient payment services. They also want a neat record of finances,” said Patricia.
Release a Program to Support MSMEs
To target the MSME market, this year the company created the Xendit Level Up program. This program is a support for 1,000 MSMEs and business people affected by the Covid-19 pandemic.
Xendit Inbound Sales Lead Patricia Muljadi said this initiative was launched after Xendit saw an increase in the number of MSMEs joining its services. It was recorded that throughout 2020 there was a surge in the use of up to 140 percent.
In addition, according to him, MSMEs also have great potential in terms of supply and demand. “Seeing from that note, our strategy is to focus on MSMEs. 19 percent of our MSMEs have gone digital but that is very far,” he said in a virtual press conference, Friday (23/4/2021).
Through this program, Xendit allocated funds of up to IDR 1 trillion rupiahs, by providing fee waivers worth IDR 1 billion to each of the selected MSMEs in Indonesia and the Philippines.
Xendit itself has no monthly fees or administration fees, but they do charge a service fee every time a successful payment is made.
They no longer incur costs to get payment infrastructure services from Xendit. Registration for Xendit Level Up is now open. There are two schemes that can be followed by MSMEs who want to get support from Xendit.
First, through the Business Pitch Challenge. This scheme is intended for MSMEs in the retail, e-commerce and service industries. Registration is open from today (23/4) to June 30, 2021.
Besides that, you can also join the Accelerator Program. This scheme is intended for MSMEs in the startup and technology industry. Registration will open in mid-July 2021.
This Program is Intended to Support and Empower MSMEs
CEO and Co-Founder of Xendit Moses Lo said the program was created with the aim of supporting and empowering MSMEs, while adopting digital transactions.
“The Indonesian people now have various choices of payment methods, and MSMEs must be able to facilitate this,” said Moses. It is known, the company that was founded in 2016 has recorded 65 million transactions with payments of US$ 6.5 billion per year.
Xendit also records an annual compound annual growth rate (CAGR) of 700%. In March, Xendit secured US$ 64.6 million in series B funding led by venture capital firm Accel.
Thus, in total Xendit has raised up to US$ 88 million in funding. Apart from Accel, other investors involved such as YCombinator. Xendit is the first Indonesian startup selected to take part in the YCombinator startup acceleration program in 2015.