P2P payments startup Xfers eyes Indonesia with $2.5m seed funding

Online peer-to-peer payments startup Xfers has raised a seed round worth an impressive US$2.5 million, the company announced today. The money comes from Asia- and Silicon Valley-based angel investors and venture capital firms, including Eduardo Saverin, Golden Gate Ventures, 500 Startups, GMO Venture Partners, Partech Ventures, BWB Ventures, and Convergence Ventures.

Xfers co-founder Victor Liew tells Tech in Asia that these are strategic investors who can provide advice and partnerships to the startup. With their help and advice, Xfers hopes to navigate the Southeast Asian markets and will rely on their input when it comes to compliance with local laws and regulations, Victor says.

Xfers has so far processed S$5.5 million (US$3.85 million), up from S$1.7 million (US$1.2 million) in August 2015. In December 2015, it processed S$1.2 million (US$841,000).

Growing in Southeast Asia

The funds are immediately available to the Singaporean startup and will help fuel its expansion into Indonesia, a “very interesting market” for Xfers. The rest of the money will go toward product development and customer acquisition, according to the company.

“Indonesia’s ecommerce scene is seeing a rapid growth right now along with its growing middle class,” Victor says. “Mobile penetration rate is going up, and consumers are generally getting more IT-savvy and making purchases online. We feel that Indonesia has the same growth opportunity like that of China in the early days and it is an exciting time for startups entering the Indonesian market.”

See: These entrepreneurs will leave Bay Area, return to Singapore to simplify C2C paymentsAfter Indonesia, Xfers will target the Philippines and Hong Kong. The latter makes sense as it’s a financial hub much like Singapore. The Philippines, on the other hand, is an attractive market for the startup because of an increasing number of tech-savvy users who prefer mobile payments and bank transfers as a form of payment over credit cards, Victor says.

With ecommerce soaring across Southeast Asia, Xfers seems to be right on time to attempt to scale in the region.

With ecommerce soaring across Southeast Asia, Xfers seems to be right on time to attempt to scale in the region. It won’t be an easy ride, however. “One of the biggest challenges in having a payment system that works across Southeast Asia is the different regulations imposed in each country,” Victor explains. “It will be tough for a startup without adequate funding to target too many countries within SEA all at once, but with the right partners, funding and expertise, we believe that startups will have a shot in creating a payment system that works across [the region].”

Whether that will be a local startup or a more established outside player remains to be seen. There is, however, a lot to be said for securing partnerships and expertise, something that players from around here might find easier to do.

Xfers enters a very busy market, in which several startups are trying to offer online payments solutions on top of established players from abroad like PayPal and Braintree, or Stripe. The team feels its approach to the problem using bank account transfers is more viable than others.

Free market

Xfers is aiming at peer-to-peer ecommerce, such as transactions on marketplaces like Carousell and Tokopedia, and small online merchants across the region. Its services include wallet as a service, payments collection, user generated payment links, and ecommerce plugins for sellers and buyers.

Xfers’ core product allows users to create a product listing they can share via social media, messaging apps, or email. Payment can be made using a single link, and the system takes care of things like payment tracking and inventory management. This way, transactions take place through bank transfers seamlessly and more cheaply to boot.

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