Xendit COO Tessa Vijaya Makes Successful Leap from Investment Banking to Electronic Payments

Merchant Gateway is growing rapidly in Indonesia, with further expansion planned in Southeast Asia.

INIn 2016, Tessa Vijaya decided to switch jobs from investment banking to an Indonesian e-payment startup, but not because the money was better, as she took an 80% pay cut. A native of a small town in West Java, she says she was fine with a significantly reduced salary. “I thought I needed to learn about a new business,” she said. “I took the leap.”

It was a very successful leap for Wijaya and Xendit, the expanding payment gateway she co-founded and became COO. In addition to being the driving force behind the company, Vijaya, 40, is also a passionate advocate for more women in tech; she initiated the Xendit Women in Tech Indonesia program, where entrepreneurs and techies exchange experiences through workshops and digital forums.

Unlisted Xendit does not disclose its earnings, but it has clearly won the trust of many venture capital firms. In September 2021, Xendit became a unicorn after raising $150 million in Series C, increasing its valuation to $1 billion. Eight months later, it raised another $300 million in a Series D round led by Coatue and Insight Partners. The latest funding brings the total to $538 million, the largest in the payment gateway industry by a Southeast Asian company.

Xendit helps businesses get what they are owed through payment channels such as credit cards, online wallets, QR codes and other e-procurement tools. Xendit’s website says it can set up an account for a business to start receiving digital payments in less than five minutes. In Indonesia, the company competes with Doku and Goto Midtrans.

From less than 10 employees in the beginning, the company now has more than 900. Initially focused on Indonesia, Xendit has expanded to the Philippines and is eyeing other parts of Southeast Asia. Unlike some tech companies that cut back amid tough market times, Xendit says it’s not laying off staff.

Xendit was started by Moses Lo while he was studying for a Master of Business Administration at the University of California, Berkeley. The original dream for Lo, an Australian citizen and member of the Forbes 30 Under 30 Asia Class of 2016, was for it to become Southeast Asia’s version of Venmo, a digital payment app. Lo, whose mother is Indonesian and father Malaysian, returned to Indonesia, where a vibrant startup scene had begun to develop, and launched a payment gateway.

Lo knew about startups, but he didn’t know much about Indonesia. When he was opening his business there, a mutual friend introduced him to Vijay, who was interested in fintech as a business opportunity. With one degree from Syracuse University and one from the University of Sydney, she worked for six years at investment firms, including Mizuho Asia Partners and Principia Management Group, founded by former Indonesian trade minister Thomas Lembong.

They met at a Starbucks in Jakarta and clicked. A week later, after coffee, Vijaya agreed to join. “Tessa has been invaluable from the beginning,” Lo says in an email. “She had a deep understanding of the local ecosystem, was passionate about solving problems in Southeast Asia, and was committed to expanding world-class technology and talent to the region.”

“Southeast Asia is an exciting place right now.”

For Vijay, moving to a startup was a change. Xendit’s office was then a small house with a room rented by another startup to cut costs, she recalls. “I know that it is not easy to build a business in Indonesia. But I could see that Lo and the team were very dedicated. They even moved and spent the night in the office.”

The time was right. In addition to her expertise in financial modeling and presentations, Vijaya has helped Xendit expand partnerships with its network. Along the way, she took on more operational and financial responsibilities. In 2018, Lo promoted Vijay to the position of Chief Operating Officer of the company.

Digital payments have soared in Southeast Asia, thanks in large part to Covid-19, but for now cash is still the king, according to the e-Conomy SEA 2021 report by Google, Temasek and Bain & Company. However, it may be difficult for him to hold onto the throne. The report predicts that cash transactions will lose dominance, falling to a 47% share of gross transaction value in the region in 2025 from 60% in 2019, opening the door wider for payment gateway companies like Xendit.

Reet Chaudhuri, a McKinsey partner who specializes in the Asia-Pacific payments space, says online spending in the region will continue to grow even if there is an economic recession. However, he notes that competition is already fierce and margins in the industry are tight for core products. Thus, some players are switching to value-added products. Payment gateway companies “have now realized that they are sitting on a lot of data because they know which merchant is getting paid, how much and from whom,” says Chaudhuri.

Xendit has adapted to the changing environment. Travel technology companies like Indonesia’s Traveloka, which used to be Xendit’s biggest source of revenue, have been hit hard by the pandemic. Xendit was looking for other types of customers, such as e-commerce and small and medium-sized enterprises (SMEs), who saw digital as a way of survival. Vijaya says that over the past two years, thousands of small businesses have sought Xendit’s services.

She also says that developing more products for SMEs is one of the three goals of the fundraiser, in addition to adding more value-added products and bringing all products to the regional market. Last year, the company started offering working capital loans for small and medium-sized businesses. In April, Xendit acquired a minority stake in Bank Sahabat Sampoerna, an SME-focused lender whose main owners are Indonesian billionaires Putera Sampoerna and Joko Susanto. Together with the lender, Xendit hopes to develop banking as a service in the country, where non-banking companies such as e-commerce and marketplace companies offer banking services such as savings accounts and debit cards by connecting to a digital bank.

With more mobile phones than people in Indonesia, but 66% of the population unbanked, Vijaya sees huge opportunities. Banking as a service “is the next big thing,” she says, adding that Xendit is exploring whether it’s possible and how it might work with banks.

In terms of regional expansion, Xendit entered the Philippines in December 2020, and eight months later invested in local payments company Dragonpay, which has built strong relationships with local customers for a decade. Xendit plans to expand to Malaysia, Singapore and Vietnam within the next two years.

“Southeast Asia is an exciting place right now,” says Vijaya. She notes that the Indonesian and Philippine markets are not the same, “and that’s actually a mistake for many global players to see the region as the same,” adding that Southeast Asian countries have different cultures, pain points and stages of technology adoption. “So unless we found a strong local team to develop the products locally, I don’t think we’re going to be involved. For example, it took us a year in the Philippines to find Yang Yang Zhang [Xendit’s managing director for the country]. If it weren’t for her, we wouldn’t have achieved such success,” she says.

Wijaya’s efforts to get more women into tech careers can be seen on Xendit. About 40% of Xendit’s staff in Indonesia are women, and Vijaya has implemented policies to retain women in leadership roles, such as return-to-work plans for new mothers and flexible and remote work options. Personally, Vijaya has been an angel investor in several startups. “It’s not about the money, because I’m investing a very small amount, but about the advice and experience I can share so they can grow,” she says.

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