Lead by top-tier Indonesian VC Firm, East Ventures, the round proved to be incredibly competitive. We continue to support the great work that founders Jordan Fain and Sidnei Budiman have achieved since our initial investment last year.
Since we lead Kini’s Pre-Seed round in 2021, we have been impressed by the rapid execution of their product roadmap and initial traction. As such, we are doubling down in their Seed Round.
Early Wage Access (EWA) means payroll-on-demand. On a typical monthly payroll cycle, by the end of each month, some workers may experience unplanned expenses or be 'short' in the lead-up to payday.
They are currently faced with limited options of finance which include predatory lending and payday loans, or informal means such as asking friends and family for money, or their employer for an 'advance'. These are all sub-par solutions for the millions starved of easy access to reasonably-priced credit. The EWA model is a well-known and exciting model that has scaled well in other comparable markets. We are backing Jordan and Sidnei to become the market leaders in Indonesia.
Co-founder, Jordan Fain (CEO & co-founder) has extensive start-up and scale-up experience at Uber AND more recently, a global stealth real-estate tech company. Sidnei Budiman (CTO & co-founder) is a serial entrepreneur and has built a fintech-focused development agency in Indonesia. He has built e-money and payments products for large Indonesia financial institutions. Their background combined with strength in sales, commercial and go-to-market, plus deep technical domain experience on product, are proving to be a dynamic duo and executing fast.
180m people in Indonesia are considered ‘unbanked’ with no access to bank accounts, savings accounts, or other to financial products.
When it comes to credit, their access is almost non-existent. Most of the current ways that this demographic accesses credit is through loansharks and other forms of predatory lending which are unaffordable. Banks consider the ‘unbanked’ as high risk borrowers making credit access even harder.
The lack of access also poses issues for employers, including the fact that they have to set aside cash on their balance sheet to loan out to employees. Financial stress can also result in reduced employee productivity while increasing absenteeism and turnover. These were the challenges that Sidnei experienced firsthand at Blipcom, which helped spark the idea behind Kini.
The EWA Model
Early Wage Access and Payroll Liquidity is a proven model across Western markets with exceptionally fast-growing companies across the US & UK funded by some of the world's leading investors. As outlined above, we're seeing new players starting to be funded in emerging markets. See below some of the players that have emerged:
Emerging markets with large populations like Mexico, Brazil and Nigeria have EWA players and it makes sense that Indonesia will adopt this model as well as new players emerge. See below for a discussion on the Indonesian landscape.
From what we're observing, payroll liquidity is a universal problem for the hundreds of millions of workers around the world who live paycheck to paycheck. We've formed this opinion based not only on the mass adoption that these players are seeing but also because some of the world's leading investors have backed comparable international opportunities to the tune of hundreds of millions of dollars. As outlined above, there is a trend where the EWA model is rolling out aggressively to emerging markets and finding product-market fit. We believe EWA will provide a welcome solution to underserved emerging markets and that there is strong potential for technology-savvy products and fintechs to capture these markets.
Vision: Product / Platform & Solution:
Kini has an expansive vision to bridge the HR/Fintech gap between employers and employees, allowing employers to seamlessly pay their employees and manage their pay on demand.
There are tens of millions of people in South East Asia who cannot get access to cheap, easy, and non-punitive credit and Kini has set out to fix this.
Kini has built a two-way product system for both employers and employees, enabling them to better manage the HR Finance operations as well as for employees to access their money sooner and more easily, as well as to save money on common everyday bill payment options.
Kini has built out an initial product suite for their customers’ workers which enables them to then ‘cashout’ their earned wages before payday for a small fee, which stops employees from having to use payday lenders or rely on friends and family for cash when they are running short.
Kini also allows employees to pay their electricity and utility bills through their application, in addition to receiving discounts on purchasing Airtime (phone credit) and purchasing items and different merchants through a QR-code purchasing integration.
Why we Invested:
Top-tier talent joining the team: Jordan and Sid are proving that they have the ability to attract top-tier talent to their team. Success in fintech in Indonesia revolves around deep integrations and partnerships with legacy platforms and systems, and Kini has onboarded a deep bench of engineering talent who will enable them to swiftly open up product opportunities and partnerships. We believe they will have an edge on their competition and expect this to flow onto the calibre of future engineering hires.
Region-leading VCs joining the round:East Ventures are a top-tier multi-stage Indonesian fund, which is a very strong signal about the future potential of Kini and the strength of its founding team. East Ventures have invested in Indonesian unicorn giants like Tokopedia (Alibaba of Indonesia - now merged with GoJEK), Traveloka, and large infrastructure companies like Xendit and Bukuwarung.
Strong Early Traction: Kini have onboarded thousands on workers onto their platform, ramping GTV as well as proving out product-market-sales fit, with the platform being used by more than 50 corporations, including industry majors Ismaya Group, Asaba, Doku, and several public companies.
With strong traction and an innovative product roadmap on the horizon, we are excited to be back again for our second investment in Kini alongside lead investors East Ventures.
Introducing our Investor Spotlight Series, highlighting the leading supporters of startups in the Australian ecosystem. First up, Daniel Johnson, a successful founder turned angel investor with over 70 startups in his portfolio so far.
AFSL Disclaimer TEN13 Management Pty Ltd (TEN13 Management) is a corporate authorised representative of Boutique Capital Pty Ltd (BCPL) AFSL 508011, CAR Number 1298306. TEN13 Nominee Pty Ltd (TEN13 Nominee) is a corporate authorised representative of BCPL, CAR Number 1298307. Together, TEN13 Management and TEN13 Nominee are referred to as we, us, or our in this document. To the extent to which this document contains advice it is general advice only and has been prepared by us for individuals identified as wholesale investors for the purposes of providing a financial product or financial service, under Section 761G or Section 761GA of the Corporations Act 2001 (Cth). The information herein is presented in summary form and is therefore subject to qualification and further explanation. The information in this document is not intended to be relied upon as advice to investors or potential investors and has been prepared without taking into account personal investment objectives, financial circumstances or particular needs. Recipients of this document are advised to consult their own professional advisers about legal, tax, financial or other matters relevant to the suitability of this information. The investment summarised in this document is subject to known and unknown risks, some of which are beyond our control and our directors, employees, advisers or agents. We do not guarantee any particular rate of return or the performance, nor do we and our directors personally guarantee the repayment of capital or any particular tax treatment. Past performance is not indicative of future performance. The materials contained herein represent a general summary of our current portfolio construction approach. We are not constrained with respect to any investment decision making methodologies and may vary from them materially at its sole discretion and without prior notice to investors. Depending on market conditions and trends, we may pursue other objectives or strategies considered appropriate and in the best interest of portfolio performance. There are risks involved in investing in our strategy. All investments carry some level of risk, and there is typically a direct relationship between risk and return. We describe what steps we take to mitigate risk (where possible) in the investment documentation, which must be read prior to investing. It is important to note that despite taking such steps, we cannot mitigate risk completely. This document was prepared as a private communication to clients, is confidential and is not intended for public circulation or publication or for the use of any third party, without our approval. Whilst this report is based on information from sources which we consider reliable, its accuracy and completeness cannot be guaranteed. Data is not necessarily audited or independently verified. Any opinions reflect our judgment at this date and are subject to change. We have no obligation to provide revised assessments in the event of changed circumstances. To the extent permitted by law, BCPL, we and their directors and employees do not accept any liability for the results of any actions taken or not taken on the basis of information in this report, or for any negligent misstatements, errors or omissions. TEN13 Disclaimer TEN13 Nominee may, from time to time hold securities referred to in the information herein and may trade in these securities as a nominee (either as principal or as agent). We may receive commissions, fees or other forms of remuneration from transactions involving investments referred to in the materials. By accepting the materials contained herein, you agree to indemnify TEN13 Management, TEN13 Nominee, Transition Level Investments Pty Ltd ACN 154 457 155, TEN13 Holding Pty Ltd ACN 634 042 783, and Birkdale Holdings (Qld) Pty Ltd ACN 120 407 981 ATF the Baxter Family Trust and any of their respectivedirectors, officers, employees, consultants, advisors or agents (TEN13 Parties) against any claim, liability, action, damage, loss, cost or expense sustained by any of them arising from or as a result of any breach by you of the confidentiality obligation under this disclaimer. The TEN13 Parties: disclaim and exclude all liability for all losses, claims, damages, costs and expenses of any nature arising out of or in connection with the materials contained herein (or any accompanying or subsequent information); and do not have any obligation to advise any person if they become aware of any inaccuracy in, or omission from, the materials contained herein (or any accompanying or subsequent information).