Payfazz, the first startup from Indonesia to make it to Y Combinator, has raised over $21 million in its latest funding round from investors including Tiger Global Management and Yuri Milner’s DST Global, according to three executives aware of the development.
The deal marks one of the largest funding rounds raised by an early-stage fintech startup in Southeast Asia.
Targeting the unbanked who constitute about 66 per cent of Indonesia’s population, Payfazz vets offline agents to act as intermediaries between banks and potential customers. It claims to work with over a million mobile banking agents.
Users can deposit cash to these agents and receive a Payfazz balance that can be used to buy prepaid phone credit or pay for electricity and other bills. Its agents earn a cut for their services while PayFazz charges a 1 per cent fee per transaction.
According to an SEC filing last month, Payfazz raised $21.4 million in equity funding from undisclosed investors. The fintech startup was seeking to raise a total of $21.65 million in the then-open round.
Payfazz did not respond to a request for comment while a Tiger Global representative said the company had no comment to offer at this time. An email sent to DST Global remained answered at the time of publishing.
Payfazz raised seed funding in 2017 after being selected for the Y Combinator accelerator programme, which famously counts global majors such as Airbnb, Dropbox and Twitch among its alumni. Y Combinator startups receive a $120,000 investment but, more importantly, become part of a global network of experienced entrepreneurs and alumni.
It has been backed by investors including MDI, Insignia Ventures Partners and Magic Fund in the past. Its co-founder Hendra Kwik, interestingly, did a short stint at now-rival Kudo, which was acquired by Singapore-headquartered Grab.
Tiger Global Management focuses primarily on the global internet, technology, telecom, media consumer and industrial sectors. Its private equity strategy has a ten-year investment horizon and targets growth-oriented private companies.
DST was founded by Yuri Milner in 2009 and makes minority investments in fast-growing internet companies. Its portfolio includes Facebook, Twitter, WhatsApp, Snapchat, Airbnb, Spotify, Alibaba, Xiaomi and Flipkart. The investor is known for having pioneered a model to provide liquidity to startups and early investors through a mix of primary and secondary transactions.