How Ayoconnect Raised $10M To Build Indonesia’s First Open Bill Network
Jakob Rost moved to Indonesia from Berlin more than 7 years ago to become Managing Director of Lazada. Jakob built Lazada’s Marketplace from zero to 70% of GTV and managed geographical expansion.
Before that, Jakob was a management consultant for The Boston Consulting Group with projects in Banking and Financial Services. After Lazada’s acquisition by Alibaba, Jakob founded Ayoconnect together with his two co-founders; he remains the CEO until today. He and his Indonesian wife have one daughter and live full time in Jakarta.
Ayoconnect is Indonesia’s first Open Bill Network, offering over 2,500 bill products from 20 categories. The network links Bill Providers such as Utilities, Telcos, Aggregators, or Publishers with Consumer-Facing Platforms and Financial Institutions. Prominent bill categories include phone credits, electricity payment, and game vouchers.
The company recently entered into a recurring property and tuition payment. Ayoconnect has processed more than 40 million successful transactions to date and enabling Channel Partners to offer and monetize bill payments to their customers. Bill Providers, on the other hand, use the network to collect recurring consumer payments faster and cheaper.
Ayoconnect operates, maintains, and extends the network and provides relevant backend infrastructure technology for companies.
In an exclusive interview with AsiaTechDaily, Jakob says:
Understand where you are and grow from it. Achieving a product-market fit is the key to a successful launch, but it’s just another element in a world where the consumer is facing new challenges that allow technology to step in as a solution. I say the best advice is to be a problem solver, which has an impact on the long term.
I would like for my daughter to discover her best path, whether it’s the choice of her career, hobbies, etc. With social media existing in her early life, I think it’s important for the next generation to know where they stand in the real world instead of being too caught up in their timeline. The second being is trying to maintain a healthy lifestyle. And most importantly, I want her to know that whatever path she might choose, she has to believe in herself and be ambitious and passionate about it.
Read on to know more about Jakob Rost and his journey.
Please tell me about your personal background and What motivated you to get started with your company?
Jakob Rost: I had a business and management background for my studies and worked across Europe in investment banking and management consulting for a couple of years. One day I received a call from across the globe saying that they were a company with a vision of building e-commerce in Southeast Asia and was looking for people who are adventurous enough to come forth and bring life into the idea. I then became the managing director of Lazada, Indonesia.
In 2016, Alibaba acquired control of Lazada with an initial $1 billion investment, and that’s when I think the landscape of technology services started to shape up in this country. I quickly realized that the system of bill payments was predominantly offline, fragmented, and manual. Along with a friend of mine, we decided to build a technology company around it that can establish an underlying infrastructure for smooth, secure, and fast digital bill payments, which has become what is now Ayoconnect.
What is your current main product, and can you share any previous product pivot story to the current product?
Jakob Rost: Our national network interconnects more than 1,000 bill providers and consumer-facing partners across 34 provinces, including Indonesia’s most prominent telco companies, state-owned utility companies, e-commerce platforms, banks, and both online and offline retailers. We apply “smart billing technology” coupled with innovative services for delivering tailor-made solutions that fit businesses and drive better ROI to our partners, so they can grow and manage their businesses more effectively. Currently, our prominent bill categories include phone credits, electricity payments, and game vouchers. We have also recently released a solution for recurring property and tuition payments and vehicle tax and property tax products.
We started in late 2015, but our business model has officially migrated from B2C to B2B since June 2020 to provide better solutions for a seamless experience and more inclusive digital billing services to our partners.
How much money have you raised in total so far? When was the recent funding round?
Jakob Rost: We look forward to working with our existing and new investors who share the strategic significance of Ayoconnect’s vision – organizing the entire Indonesian biller ecosystem into one central network. We have raised US$5 million in Pre-Series B funding from strategic global investors and have raised over US$10 million.
What were the internal decision processes in determining when to begin fund-raising, and what were the logistics for this? And how many investors have you met so far, and how did you meet these investors, and which channels worked best for you?
Jakob Rost: We are looking for investors that share the same vision as us to advance fintech to improve Indonesia’s financial inclusion and empower Indonesia’s digital economy. They should be able to bring value to the business beyond just the funds they inject. This can be in the form of experience, network, or strategic fit.
Our Pre-series B fund will be used for tech investment and growing our network of partnerships to bridge the gap between Bill Providers and Channel Partners with a strong infrastructure capable of providing reliable, secure, and fast digital bill payment services to our partners.
That being said, we are extremely fortunate to have the opportunity to support some of the most experienced firms in the region. This round’s investors include BRI Ventures, the corporate venture capital arm of Bank BRI, Tokyo Exchange (TYO) listed internet company Kakaku.com, Inc., and Brama One Ventures. Existing investors accompanied by global fintech specialist Finch Capital and Amand Ventures also participated in the round. Other existing investors in Ayoconnect include Strive and AC Ventures.
What are the biggest challenges and obstacles that you have faced in the process of fund-raising? If you had to start over, what would you do differently?
Jakob Rost: The pandemic that started earlier this year had sent financial shockwaves around the globe. Investors are becoming more cautious and risk-averse. However, we quickly discovered that our technology is a solution that is needed by Indonesian end customers, bill providers, and consumer-facing platforms more than ever in current times.
We see a growing amount of transactions every month. Amidst the hard times brought on by COVID-19, our business will remain focused on providing an inclusive bill payment by building more value-added solutions together with our partners.
What are your milestones for the next round? And what are your goals for the future?
Jakob Rost: We will stay dedicated to the bill payments industry in which we also aim to build more value-added solutions that we can roll-out to our clients (bill providers and channel partners). Some of it that we are going after is essentially a blue ocean with hundreds of thousands of micro-billers; with the tremendous potential and the 360º of product range offering that we had to offer, we’re confident for the coming times. We also got some exciting projects and announcements up our sleeves.
How have you attracted users, and with what strategy have you grown your company from the start to now?
Jakob Rost: We are a B2B company, so our clients are utility companies, state-owned enterprises, private corporations, and financial institutions. Understanding the struggle that our clients and partners face and being able to solve them with much-needed solutions have been our main selling point.
We frequently get in touch with our partners to constantly improve our performance and simultaneously gain valuable insights from them. As the Leading B2B Network for subscription payments and digital goods solutions, Ayoconnect has grown significantly by providing innovative solutions that solve real problems.
Which has been the best marketing software tool for the growth of your startup, and why?
Jakob Rost: We found most of the industries that needed billing services and networks are the ones who will approach us, but we’re also growing our audiences organically. Currently, we are processing a backlog of integrations to integrate with our API. Over the last years, we invested heavily in building a great tech platform and best-in-calls operations. Those decisions are now paying off nicely.
What do most startups get wrong about marketing in general?
Jakob Rost: Understanding your target customers, whether that’s B2B or B2C, is key. This means you can utilize the right channels and messages. This was also a learning experience for us, especially in the early days. If done wrong, a lot of time and money can be wasted. Furthermore, we believe that marketing is increasingly a long time effort. Building the right reputation and brand takes time; there are no quick wins. We realized we want to be a long term partner for our clients and support them with their growth journey all the way.
How do you plan to expand globally?
Jakob Rost: Indonesia has a total of 272.1 million population. Bill payments, such as gas, water, utilities, internet subscriptions, insurances, rent, tuition payments, and so, are significant parts of overall GDP. It’s an enormous and highly fragmented ecosystem with huge potential for endless improvement: that’s where we’ll be directing our focus for now.
Our strategy is to develop efficient and frictionless solutions for the biller ecosystem in Indonesia to enhance our partners in collecting bill payments and simultaneously improve the experience for their customers. We achieve this by having the most talented and motivated individuals that work together remotely from two countries. Our tech center is located in Pune, India, while our business headquarters is in Jakarta, Indonesia.
What are the most common mistakes companies make with global expansion?
Jakob Rost: We see the need for billing and bill payments technology and digitalization in many markets beyond Indonesia. But we also realized that the Asian market is very diverse in terms of culture, language, currencies, and political systems. This requires a special and very localized approach.
How do you handle this COVID-19 outbreak situation for your company’s survival in the future?
Jakob Rost: In early March, we shift to WFH to ensure the safety of our team and keep evaluating the policy and SOP for maintaining effective work. We’ve also been very prudent and cautious about our spending. While helping our partners’ businesses to grow is our ever top priority, we continually innovate more value-added solutions that will subsequently grow our revenue.
What are the most common mistakes founders make when they start a company?
Jakob Rost: There are some common ones; the most important I found so far is finding the right product-market fit (PMF). All of the brilliant products, services, and other successful entrepreneurs have offered their customers a real needed value proposition of solution. Finding the right product-market fit is a prerequisite for manageable and steady growth; a company can only come up with a valuable product when they are focusing on what the customer really needs. One thing to be highlighted is the consumers’ feedback. With the right tools, this information can provide you with an insight into whether your product is well received and ready to be deployed into a minimum viable product or if you should continue iterating it. Failing to do so will typically result in launching a solution with a lack of product-market fit and isn’t sustainable for the business.
What’s the best advice you’ve ever received? And What advice do you have for someone who is interested in doing similar things like yours or in a similar direction?
Jakob Rost: Understand where you are and grow from it. Achieving a product-market fit is the key to a successful launch, but it’s just another element in a world where the consumer is facing new challenges that allow technology to step in as a solution. I say the best advice is to be a problem solver, which has an impact on the long term.
What are the top-three books or movies (TV series) that changed your life and why?
Jakob Rost: I generally enjoy business movies or TV series such as Suites or Billions. I heard that Succession is good, but I haven’t had the chance to watch it yet. 16. How do you keep yourself motivated every day? The excitement about what we build, the impact we make, how we change digitalization in the financial and billing ecosystem has really motivated me and the whole team. On a much personal note, I feel having a routine also helps to motivate me. I try to implement this to my team by having a 30 minutes daily online morning meeting for heads of the department.
This is designed to make everyone aware of new updates and what needs to be done and create a habitual lifestyle. Working closely and hand-in-hand with the whole team to bring our vision to life is also something that keeps me looking forward to tomorrow.
What are the top three life lessons that you want your (future) sons and daughters to know?
Jakob Rost: I would like for my daughter to discover her best path, whether it’s the choice of her career, hobbies, etc. With social media existing in her early life, I think it’s important for the next generation to know where they stand in the real world instead of being too caught up in their timeline. The second being is trying to maintain a healthy lifestyle. And most importantly, I want her to know that whatever path she might choose, she has to believe in herself and be ambitious and passionate about it.
What would you like to be remembered for?
Jakob Rost: It would be playing a small but important role in driving the south-east Asian tech ecosystem and shaping its development in the early days with Lazada and Alibaba, through our own company Ayoconnect, or through encouraging new founders and companies to start and grow and helping them along the way.
This article was originally published on Asia Tech Daily on November 12, 2020.