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Ayoconnect uses bills to connect Indonesia

With money raised and Mastercard on side, the Indonesian startup is automating bill payments to win deals.



Jakob Rost, Ayoconnect

Ayoconnect, a Jakarta-based technology startup, has raised a pre-Series B financing round of $5 million to embed itself more deeply with banks and fintechs in Indonesia.

The company automates everything around bill payments. Its co-founder and CEO, Jakob Rost, says in developed countries such as his native Germany, billing is just background noise, already integrated into banking services.

But in Indonesia, bill payments are daily hassles for everyone, with few services integrated into bank accounts or fintech offerings.

Rost previously ran ecommerce site Lazard for Indonesia, and learned firsthand that customers routinely have various bills and recurring payments to be met, from utilities to loans to school tuition – but that these are all standalone, rarely incorporated into a bank’s online consumer offering.

This is partly because Indonesia, a country of about 260 million people, has both a lot of unbanked. It’s also due to a general lack of connectivity because businesses are so fragmented across the vast archipelago.

From B2C to rails

His first iteration of Ayoconnect, launched in 2016, was a direct-to-consumer model, with a mobile app loaded with bill payment options. This proved untenable so the company then pivoted to building the infrastructure to make connectivity possible.

“We need to build the fundamentals first,” Rost said. “We couldn’t solve the billing problems of hundreds of millions of people directly. Now we are connecting banks, ecommerce sites, utility players, insurers, fintechs, and online-to-offline retailers.”

Banks, even tier-1 players, lack billing options on their mobile apps. Rost says they might have one or two utilities for, say, water or gas. But there will be hundreds of such providers across the country. The limited number of billing options may work for a bank that is only targeting people in, say, Jakarta or Surabaya. But it won’t work for an institution with national ambtitions.

“We build the pipes and bring standardization,” Rost said. “We’re like the Mastercard for bill payments.”

Mastercard has onboarded the company as a partner, to help it extend card usage for paying bills among merchants with Ayoconnect’s software.

Pre-B funding

Rost says the latest funding round, which raised $5 million, will go to expanding the commercial team as well as invest more in the firm’s technology, in order to partner with more banks and fintechs.

“We’re trying to add more use cases around bill payments,” Rost said. “Most people pay two or three bills every week, and many of these are recurring payments. It leads to good engagement.”

Ayoconnect sells a SaaS (software as a service) subscription to partners such as banks, fintechs and utilities, to help them manage operational details like reconciliations and introduce autopayments.

For example, fintechs including digital banks can use billing as part of their personal-finance services, while traditional banks can enhance customer apps with more specific billing alerts and granular information.

Rost describes the latest funding round as “pre-Series B”. The company initially raised a Series A in 2017. He says a classic Series B in Indonesia is $10 million or more, which was beyond Ayoconnect’s needs. The firm charges for its SaaS service and also takes a cut off of payments made on its platform. It is not profitable: Rost says it is simply investing more in its technology, but didn’t say when the business would aim to move into the black.

“We’re trying to be lean,” he said. “Everyone uses us but no one knows us.”

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Ayoconnect uses bills to connect Indonesia