(L-R) Xendit Co-Founders Juan Gonzales, Moses Lo, Tessa Wijaya, and Bo Chen
Xendit provides payment solutions and simplifies the payment process for SMEs, e-commerce startups and large enterprises in Indonesia, the Philippines, and Southeast Asia.
Founded in 2015 by Moses Lo (CEO), Tessa Wijaya (COO), Bo Chen (CTO), and Juan Gonzales (Principle Software Engineer), Xendit enables businesses to accept payments (from direct debit, virtual accounts, credit and debit cards, eWallets, retail outlets, and online instalments), disburse payroll, run marketplaces and more on an easy integration platform supported by 24×7 customer service.
The fintech firm serves over 3,000 customers, including Samsung Indonesia, GrabPay, Ninja Van Philippines, Qoala, Unicef Indonesia, Cashalo, and Shopback.
Xendit, the first Indonesian startup to graduate from Y Combinator, became a unicorn in 2022. Last year, it closed a US$300 million Series D investment round. It has raised US$535 million across several rounds of funding so far, and its investors include Coatue, Insight Partners, Tiger Global, Accel, Amasia, and Goat Capital.
In this interview, CEO Moses Lo discusses the company’s journey and achievements and how it navigates the current global economic crisis.
Excerpts:
How has been the past 2-3 years for the company from a business growth perspective?
It has been great. We have continued growing fast and are proud of our growth coming out of COVID-19. It is also good to see our new markets growing well too.
How does the current global economic slowdown affect your business, and what steps have you taken to mitigate any negative impacts? Have you noticed any changes in customer behaviour or demand, and how have you responded?
We see a general slowdown in the economy which means we see slower growth from many of our customers. To respond to this situation, we’ve looked for new types and new verticals of customers that we can help with our products and services.
We continue to talk to our customers about what they need the most and what’s important to them during this period. We focus on parts of the product that can increase efficiency and solve the pains that customers are talking about
How has your financial strategy changed in light of the current market conditions, and what measures have you taken to ensure long-term sustainability?
In a macro environment like this, the money you get won’t be as cheap as when the markets were good, so we need to be more controlled and aware of costs relative to revenue.
Can you speak of recent fundraising efforts and how the current economic climate impacted those efforts?
We were lucky to raise enough funds when markets were strong. Our latest round was a Series D in 2022. We’ve managed the cash wisely, so we have a long runway. So we don’t need to raise more money for a long period.
Can you discuss any cost-cutting measures you’ve implemented and how those measures have impacted your business operations? Did you lay off employees to stay afloat in the market?
We’re putting greater emphasis on the return on investments (ROI) of teams and initiatives. This means making sure we are being more careful in spending money, and when we do, we make sure that the ROI is there.
Can you speak of any market opportunities that have emerged due to the economic downturn and how your company is capitalising on those opportunities?
From a product point of view, times like this bring different challenges from our customers, so we are adapting to meet their needs (e.g. increasing conversion rates increases ROI on our merchant spend).
Also Read: Xendit becomes a unicorn after a Tiger Global-led US$150M Series C round
Our war chest allows us to form strong partnerships with other tech companies.
How do you balance the need for short-term financial stability with the long-term goals of your business?
For a long time, with previous market conditions, startups focused more on short-term wins rather than long-term goals. Macros now provide an excellent shift to better balance the two – which means we can also focus on and achieve our long-term goals.
Can you discuss your plans for diversifying your revenue streams or expanding into new markets in light of the current economic climate?
We’ve already expanded into Malaysia and will continue to see more opportunities in these macro conditions. Southeast Asia presents many growth opportunities, and we’re looking at more countries for expansion.
How have you maintained a strong company culture and motivated your team during these challenging times?
More than ever, we need to band together through crucible moments in wartime – these are often the best opportunities for teams to bond because you know you can make it together.
Do we see an end to the raise-cash-burn-cash growth model and the emergence of the ‘make profits, sustain & grow’ model?
Given the macro-environment, more companies are moving down the profit and loss (P&L). There’s still an appetite to ensure growth, and those that can scale are more valued than those that can’t. Contribution margins and lower parts of the P&L matter more these days.
What learnings can early or growth-stage companies take from late-stage companies?
If I knew I would get here, I could’ve done many things to prepare for this scale, such as putting in the proper mechanism to support large-scale distributed teams. Amazon has excellent advice and experience doing this well.
How is the mindset and cultural shift happening internally since we are in a high-interest rate environment and funding isn’t going to be as easy as before?
At Xendit, we’re spending a lot of time doing three things:
1. Setting the context: developing a “wartime” mindset
2. ROI and accountability: measuring the ROI of every single initiative/person/idea and forcing much greater responsibility for decisions, resources, etc.
3. AI: the advent of AI means we can be much more productive at higher quality. For example, our engineers saw 60–6,000 per cent capacity and efficiency improvements.
—
Fundraising or preparing your startup for fundraising? Build your investor network, search from 400+ SEA investors on e27, and get connected or get insights regarding fundraising. Try e27 Pro for free today.
The post ‘Develop a wartime mindset during global crisis like this’: Xendit CEO Moses Lo appeared first on e27.