Indonesian financial technology startup PAYFAZZ has raised $53 million in a Series B funding round led by B Capital Group and Insignia Ventures Partners.
The round was joined by existing investors Tiger Global Management, Y Combinator, ACE & Company and Quiet Capital and new backers, including BRI Ventures, the startup announced Monday.
The Indonesian firm plans to use the Series B proceeds to strengthen its financial services offering for the country’s rural users and explore new opportunities across Southeast Asia.
DealStreetAsia had in January reported that PAYFAZZ had secured fresh funding from B Capital and Tiger Global.
Founded in 2016 by Hendra Kwik, Jefriyanto, and Ricky Winata, PAYFAZZ claims to operate Indonesia’s largest agent-driven banking network with over a quarter-million merchants and small restaurants.
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. Users can deposit cash with these agents and receive a PAYFAZZ balance that can be used to buy prepaid phone credit or pay for electricity and other bills. Agents earn a cut for their services while PayFazz charges a 1 per cent fee per transaction.
The company has recently expanded its portfolio from bill payments to loans and offline merchant payments.
“We see that fintech apps accessible through a smartphone will revolutionize the financial services industry in the region. 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,” said PAYFAZZ co-founder and CEO Kwik in a statement on Monday.
PAYFAZZ became the first startup from the archipelago to make it to the Y Combinator accelerator programme in 2017. Last year, it raised over $21 million from investors including Tiger Global Management. The deal marked one of the largest funding rounds raised by an early-stage fintech startup in Southeast Asia at that time.
Singapore- and US-headquartered B Capital recently closed its second global fund for B2B growth-stage investments at $820 million, bringing its total assets under management to nearly $1.44 billion. It invests between $10 and $60 million in companies at Series B, C and D stages.
The other Series B lead investor, Insignia Ventures Partners, closed its second fund at its hard cap of $200 million, it announced in October last year. The fund will focus on early-stage technology investments in Southeast Asia.