Banking & Payments
GajiGesa gains insights before people are paid
Could the Indonesian employee-benefit fintech grow into becoming a digital bank?
Jakarta-based fintech GajiGesa is looking to add financial services partners as it expands features available over its app service aimed at blue-collar workers in Indonesia.
“Our vision is to redefine payroll in Southeast Asia,” said Vidit Agarwal, CEO and co-founder.
GajiGesa launched two years ago as a service to enable employers to pay salaries more frequently than the standard end-of-the-month period. This has given it insight into individuals’ spending and financial habits, and a growing trove of “pre-pay” data.
Founding the business
Agarwal, recently Stripe’s head of Asia Pacific business development who turned into a startup advisor, and his wife Martyna Malinowska, a product lead at SC Ventures, decided to leave their jobs and establish GajiGesa while stuck working at home in Singapore during the Covid pandemic.
“I was working on a failed startup and she was keen to build something,” Agarwal said. “The biggest question was should we work together. For me it’s about building the business and for her it’s about making an impact. You need money to have an impact, which means you need to be a VC-backed company.”
They combined their experiences in payments, banking, and startups to launch a company that aims to give workers access to their pro rata monthly earnings. Malinowska focuses on product development, engineering and marketing, while Agarwal oversees the business, including dealing with customers and investors.
They raised several rounds totaling $9.1 million, including a pre-Series A in November 2021 that raised $6.6 million. MassMutual Ventures was the lead. The business went live in Indonesia in early 2021.
Earned-wage access hasn’t worked because it presents too much of a headache to human-resource departments. GajiGesa’s app is meant to digitize the process. Depending on conditions set by employers, workers can withdraw the money they’ve earned so far that month into a bank account or e-wallets such as DANA or GoPay.
GajiGesa pitches itself as a benefit solution, not a financial app.
“These models exist informally in Indonesia,” Agarwal said, citing a petty cash advancement known as ‘kasbon’. Companies might grant it upon request.
Workers who can’t access cash they need might end up asking loan sharks, and if they don’t repay, the loan sharks might send thugs to their workplace, which can disrupt a company’s operations. Enabling HRs to digitize kasbon is a way to help retain employees. “It’s a benefit, not a loan,” he said.
But GajiGesa is working indirectly with banks and insurance companies to put financial services on top. It partners with IO Connect, an embedded-API platform that brings banking and e-wallet connectivity, and with Qoala, the Indonesian insurtech.
Becoming a bank?
“This is a daily app that workers use,” Agarwal said. “Workers can use it to top up their phone data, pay bills, or get a loan or insurance.”
Down the road, he says the company would make for an acquisition target by a bank. Or it could apply for its own banking license. “We could become a digital bank for blue-collar workers,” Agarwal said.
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That may be a ways off – the company is still young, and needs to build out more products and learn new markets. But it is developing a competitive edge based on the data it sees that other fintechs or financial institutions do not. It gains access to payroll information before workers actually receive their wages, which gives it insight into spending and financial trends.
“Other financial services come in to play after someone’s been paid,” Agarwal said. “Because we’re inside the payroll cycle, we become the only choice.” The app builds a credit score on workers, based both on finances and on behavior. Are workers stable, do they show up consistently, are they using money for household needs, for gas, for financial products?
GajiGesa’s users are lower-class workers at textile factories and plantations, or gig workers like Gojek drivers. It also has urban companies with more educated workers. The app provides verifiable information on people that banks can’t access elsewhere. It also provides useful insights on labor behavior to employers.
It now has about 500,000 workers across Indonesia. Agarwal didn’t quantify the number of employers who sign up to offer GajiGesa apps to their workforce.
The fintech’s revenues vary by employer. Companies can pay for a subscription or on a per-transaction basis. Companies can bear the cost or pass it through to their workers. They can pay based on transaction percentages or as fixed fees. The companies can decide how many times a month a worker can access their accrued wages.
GajiGesa also tweaks what workers see on the app: it will emphasize basic financial education to less-educated or unstable gig workers, while it might be more up front with financial products for urban white-collar workers.
Although GajiGesa has regional ambitions, for now it is doubling down on Indonesia, going deeper into smaller cities and remote islands. The company needs to invest in new product streams and entering other markets.
Since its last fundraise, the environment for capital has deteriorated. “I have 24 months of runway,” Agarwal said. “We’re a frugal company. We haven’t had any layoffs. Now is not the right time to go back to the market, but we might do a raise next year.”