Open finance startup Ayoconnect’s APIs enable financial inclusion in Southeast Asia

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Focused on Southeast Asia, Ayoconnect’s APIs accelerate it to launch new financial services for businesses, rather than requiring them to build their own technology infrastructure. It has also been licensed by Indonesia’s central bank, enabling it to provide more services. The open finance startup today announced that it has closed a $13 million Series B extension round led by SIG Venture Capital, with participation from CE Innovation Capital and returning investors PayU, the payments and fintech business of Prosus. This raises its total to $43 million, including the first installment of its Series B, which was led by Tiger Global and closed in January 2022.

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Founded in 2016, with a team of approximately 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 awarded a Bank of Indonesia (BI) Payment Services Provider Category 1 license. Ayoconnect says it is the only open finance player in Indonesia to be licensed by the central bank.

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Ayoconnect’s new funding will be used for leadership hiring, and on Ayoconnect’s product and technology, including new payments, data and banking solutions and new APIs for account opening and card issuance.

The startup recently launched automatic recurring direct debit with seven of Indonesia’s largest banks (Mandir, BRI, BNI, CIMB Niaga, Danmon, Bank Syria Indonesia and Bank Neo Commerce). This allows Ayoconnect’s customers to access its Direct Debit API and get the ability to make recurring debits from customers’ savings accounts across multiple banks.

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Prior to starting Ayoconnect, founder and CEO Jacob Rost was Managing Director at Lazada. After leaving Lazada, he spent several years in Indonesia, where he saw how the country could benefit from greater digital financial inclusion. For example, it is the world’s fourth largest country by population, but almost half of the people do not have banking facilities, he said. It also has a complex geography, resulting in weak financial infrastructure, fragmentation and low standardization in the banking sector. In addition, Rost said, consumer-facing businesses in Indonesia do not have the digital financial infrastructure to manage their own finances while serving customers.

Ayoconnect re-emerged soon after its Series B initial closure as it grew rapidly and also secured significant strategic partnerships after receiving its BI license. Rost said the new capital will strengthen Ayoconnect’s balance sheet and prepare it for future growth over the next few years.

The platform now serves 200 API clients, including large banks, financial institutions, tech unicorns and fintechs, and offers over 4,000 embedded finance products. Its APIs include two categories: Open Banking APIs and Payment Services APIs, with the goal of creating the most complete open finance stack in Southeast Asia.

Some examples of financial services launched by Ayoconnect’s customers include the aforementioned direct debit, embedded finance (it has partnered with PT Kereta AP Indonesia (KAI), the state-owned operator of railways in Indonesia) to introduce new ticketing and productivity features. Includes launch. KAI Access mobile app, which enables users to purchase cellphone credits, internet data subscriptions and electricity tokens). It partnered with Indonesia’s largest Islamic bank, Bank Syria, to add new digital and mobile capabilities with the goal of greater financial inclusion and economic growth among its customers.

Which other Southeast Asian startups in the open finance space include BRIC, Finverse, Brancus and Finantior as competitors? One way to differentiate Ayoconnect is by being the only licensed open finance platform in Indonesia, which enables it to offer solutions that are not yet available in the market.

“While open banking and open finance are fairly well established in Europe and the Americas, the industry is still very small but growing rapidly in Southeast Asia. In Indonesia, hundreds of millions of people are adopting new digital services, while many are still without access to basic financial services like bank accounts,” Rost said.

“As such, there is huge potential for open finance in this area and there is a ton of opportunities for this sector to grow. Excited.”

In a statement, Akshay Bajaj of SIG Venture Capital said that the Ayoconnect team “has been driving high-volume APIs for years and is incredibly committed to helping customers quickly and securely launch attractive and profitable use cases.” As a result of its expanded capabilities, Ayoconnect continues to experience strong and growing demand from banks and API customers. We love their approach and believe they have the ability to transform the future of payments in South East Asia and has the potential to increase.”

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