Ayoconnect denies $5m in alleged dubious transactions amid audit

(From left) Ayoconnect’s CFO Alex Jatra, COO Jakob Rost, and CEO Chiragh Kirpalani in the company’s office in Jakarta / Photo credit: Ayoconnect

Ayoconnect has denied claims of suspicious transactions worth US$5 million as the Jakarta-based fintech firm undergoes an audit initiated by one of its investors, Mandiri Capital Indonesia (MCI).

Chiragh Kirpalani, co-founder and CEO of Ayoconnect, tells Tech in Asia that the alleged dubious transactions are a “misunderstanding” and will be clarified once the audit is completed.

MCI launched the audit because it initially considered joining Ayoconnect’s US$2 million bridge round. But since this was a down round, the state-owned VC conducted due diligence in compliance with its policy.

MCI ultimately sat out the fundraise, which closed in August. Carried out by an external third party, the audit process has been running for three months, Kirpalani says. However, he is uncertain when it will be completed.

“This audit covers the entire business – from bookkeeping, standard operating procedures, and processes – and not just one transaction,” Kirpalani tells Tech in Asia. “We are fully supportive, providing access to all data and records to the auditor.”

Ayoconnect raised the bridge funding from existing investor Finch Capital, with ION Pacific participating in the round. Kirpalani emphasizes that all investors joining the round were informed about the audit from the start.

In addition, Kirpalani says the new funding will provide a “final push” for Ayoconnect to reach profitability. The company is targeting profitability “in the coming quarters,” pointing to a leaner burn rate and improved margins. However, he didn’t share details about its current burn rate and margins.

With the latest funding, the fintech firm’s runway has been extended to around 22 to 24 months.

Ayoconnect was founded in 2016 by former Lazada managing director Jakob Rost, along with Kirpalani and Adi Vora. It provides full-stack payment API solutions for businesses, primarily offering direct debit, virtual cards, instant cash transfers, and digital products such as telecom, electricity, and water bill payments.

The company has raised a total disclosed funding of almost US$50 million.

Ayoconnect has implemented two rounds of layoffs: one in June this year and the other in 2023, when it axed 10% of its workforce. Kirpalani says the job cuts were aimed at minimizing the company’s expenses.

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