Focused on Southeast Asia, Ayoconnect’s APIs make it faster for businesses to launch new financial services instead of building their own technology infrastructure. It is also licensed by the Central Bank of Indonesia, which allows it to offer additional services. The open finance startup today announced the closing of a $13 million Series B expansion round led by Sig Venture Capital, with participation from CE Innovation Capital and returning investor PayU, a process payments and fintech business. This brings the total raised to $43 million, including the first tranche of Series B, which was led by Tiger Global and closed in January 2022.
In the year Founded in 2016, with a team of around 250 people, Ayoconnect is currently working towards greater financial inclusion for Indonesian consumers and SMEs. It works with regulators and existing banks, and was recently granted a Category 1 license by Bank Indonesia (BI) as a payment service provider. Ioconnector claims to be the only open finance player in Indonesia licensed by the central bank.
Ayoconnect’s new funding includes leadership hiring and development of Ayoconnect’s product and technology, including new solutions for payments, data and banking, and new account opening and card issuance.
The startup has recently launched automated recurring direct payments with seven of Indonesia’s largest banks (Mandiri, BRI, BNI, CIMB Niaga, Danamon, Bank Syariah Indonesia and Bank Neo Commerce). This allows Ayoconnect customers to use the Direct Debit API and pay recurring debits from customers’ savings accounts across multiple banks.
Before starting Ayoconnect, Founder and CEO Jacob Rost was a Managing Director at Lazada. After leaving Lazada, he lived in Indonesia for several years, seeing how the country could benefit from digital financial inclusion. For example, it is the fourth most populous country in the world, but half of the people are unbanked. It also has a complex geography, resulting in poor financial infrastructure, fragmentation and standardization in the banking sector. Additionally, Rost added, consumer-facing businesses in Indonesia lack the digital financial infrastructure to manage their own finances while serving customers.
Ioconnect has re-launched after closing its Series B round as it grew rapidly and secured important strategic partnerships after receiving the BI license. Rost said the new capital will strengthen IoConnect’s balance sheet and set it up for future growth over the next few years.
The platform now serves 200 API customers, including large banks, financial institutions, technology unicorns and fintechs, and offers more than 4,000 embedded financial products. Its APIs cover two categories: open banking APIs and payment services APIs, with the aim of building the most complete financial stack in Southeast Asia.
Some examples of financial services launched by Ayoconnect customers include the aforementioned Direct Debit, Embedded Finance (in partnership with Indonesia’s state-owned railway operator PT Kereta Api Indonesia (KAI) to introduce new ticketing and productivity features that allow users to purchase mobile phone credits, internet data subscriptions and electricity tokens KAI Access Mobile App). It has also partnered with Bank Syariah, Indonesia’s largest Islamic bank, to add new digital and mobile capabilities with the goal of greater financial inclusion and economic growth among its customers.
Other Southeast Asian startups in the open finance space include Brick, Finverse, Brancas and Financier as competitors? One way Ayoconnect stands out is by being the only licensed open finance platform in Indonesia, which enables it to offer solutions not yet available in the market.
While open banking and open finance are reasonably well established in Europe and the US, the industry is still very young in Southeast Asia, but growing rapidly. In Indonesia, hundreds of millions are adopting new digital services, while many others lack access to basic financial services such as bank accounts, Rost said.
“There is open financing in this region and many opportunities to further grow the sector. We are excited to see the activity in the space and play our part in moving the ecosystem forward.”
In a statement, SIG Venture Capital’s Akshay Bajaj said the Ayoconnect team “has been running high-volume APIs for years and is incredibly well-positioned to help customers launch exciting and profitable use cases quickly and securely. Due to its scalability, Ayoconnect has strong and growing demand from banking and API customers.” We love their vision and believe they have the potential to transform and improve the future of payments in Southeast Asia.