How Xendit rose quickly in Southeast Asia’s crowded fintech space

For Xendit CEO and co-founder Moses Lo, having his company dubbed the “Stripe of Southeast Asia” is both a compliment and an aspiration.

Xendit, which began as a peer-to-peer payments (P2P) provider in 2015, was the first Indonesian company to be accepted into seed-stage accelerator Y Combinator (YC). Midway into the 12-week program, the startup pivoted into a payment gateway firm – a bet that has paid off.

Lo recalls that when Xendit was starting out, existing payment gateways, which enables businesses to collect and transfer payment data from buyer to seller, were unreliable. “What we really noticed is to build [a P2P payments] business, we had to build all the infrastructure ourselves,” he shares. “That got me thinking: This infrastructure really doesn’t exist.”

Xendit CEO and co-founder Moses Lo / Source: Xendit

Today, Xendit’s services are used by fashion ecommerce company Zilingo, cashback platform ShopBack, and even the United Nations International Children’s Emergency Fund, among others. Beyond payment solutions, Xendit also offers fraud detection and payroll disbursement.

The company’s year-on-year revenue has grown 700% over the past five years, and it processes more than 65 million transactions worth US$6.5 billion annually. While that’s a far cry from San Francisco-based Stripe’s total payment volume of US$350 billion, Lo believes that Xendit’s best days are ahead.

For a fixed or percentage fee, businesses can use Xendit to accept and send payments, get business financing, and manage taxes, among other services, with no-code integrations that can go live in as quickly as four hours, according to Lo.

At present, 80% of payments that go through these no-code integrations come from large corporations, while small and medium-sized businesses (SMBs) account for 20%.

Image credit: Timmy Loen

Xendit declined to reveal exact revenue figures but says its unit economics are positive.

In March, the startup raised US$64.6 million in a series B round led by returning investor Accel. While the company, which has offices in Indonesia and the Philippines, isn’t planning to enter new markets now, Lo hints that it may do so in the next few years.

New growth, meet old growth 

Xendit’s user base has also grown steadily over the last five years, thanks to a surge in demand for ecommerce and digital products like video subscriptions and online gaming. This created a greater need for digital e-wallets and other payments services, which consequently led to  a 500% increase in the company’s user base last year, Lo says.

Ecommerce’s sharp rise is expected to continue while sectors such as travel and food and beverage – industries that Xendit is strong in – will become reinvigorated as Covid-19 vaccination efforts step up. These twin engines of growth give Lo confidence for the future, despite tightening competition in Southeast Asia’s payment gateway market. There were 24 players in the space in 2015, but that figure stands at 38 today, according to Crunchbase.

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