Target Company Overview

Kini, meaning ‘now’ in Bahasa, is pioneering an Early Wage Access (EWA) platform aimed at addressing the critical financial access and liquidity challenges faced by over 180 million people in Indonesia. Many Indonesians live paycheck to paycheck, and data from the Bank of Indonesia reveals that 75% of the population cannot manage unexpected expenses up to US$36 (Rp 500,000). Furthermore, 66% of Indonesians are underbanked, often forced to rely on predatory payday lending options that can see interest rates soaring above 400% APR.

Since our initial investment in the Pre-Seed round in 2021, we have witnessed significant progress and swift execution in Kini's product development, leading us to participate further in their recent US$4.3 million Seed round, in which we are investing an additional US$500,000.

Industry Overview in Indonesia

Indonesia, with a sizable population that is largely unbanked, presents a unique but challenging landscape for financial services. Currently, around 180 million individuals lack access to traditional banking, savings accounts, or formal credit products. This demographic often resorts to loansharks or predatory lenders, further entrenching their financial instability. Banks view this segment as high-risk, making credit access even more improbable.

The gap in financial inclusion not only affects individuals but also poses challenges for employers who must allocate cash reserves to loan to employees. The financial stress experienced by workers can, in turn, lead to diminished productivity and higher absenteeism rates. Founders Jordan Fain and Sidnei Budiman were inspired by these systemic issues, notably the burdens Sidnei faced during his time at Blipcom, to create Kini.

The EWA model, where employees can access earned wages on-demand, has already gained traction in Western markets, with several companies in the US and UK seeing substantial growth, backed by significant investments. Emerging markets are now witnessing a similar trend, as the demand for flexible payrolls rises among workers living paycheck to paycheck.

In Southeast Asia, where many workers struggle with access to reasonably-priced credit options, Kini's approach addresses a crucial need. The ongoing shift toward digital financial solutions offers a fertile ground for EWA platforms to thrive and scale. Thus, the potential for technology-driven financial products to meet the needs of these underserved markets is promising.

Rationale Behind the Deal

Kini's EWA model presents a compelling solution to the urgent liquidity issues faced by employees, allowing them to manage their finances more effectively. With thousands of workers already onboarded and the platform currently utilized by over 50 corporations, including industry leaders, Kini demonstrates strong early traction and product-market fit.

By investing in Kini, we recognize the urgent need for innovative financial services in Indonesia and the opportunity this company has to become a leader in the EWA segment. Our follow-on investment reflects confidence in Kini's potential to deliver impactful solutions that resonate with both employers and employees.

Investor Insights

We are proud to support Kini alongside East Ventures, a prominent multi-stage Indonesian venture capital firm. East Ventures has a proven track record of investing in successful Indonesian startups, including giants like Tokopedia, Traveloka, and Xendit. Their involvement further validates Kini's growth prospects and the capabilities of its founding team.

Co-founders Jordan Fain and Sidnei Budiman bring a wealth of experience and talent to the table. Jordan has an impressive background in scaling startups at Uber and a global stealth real-estate tech company, while Sidnei has established a fintech-focused development agency in Indonesia. Their combined expertise in product execution and deep industry knowledge makes them well positioned to navigate the complexities of the Indonesian financial landscape.

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In our expert opinion, this follow-on investment in Kini is a strategic move that extends beyond mere financial backing. With strong traction in an underserved market, Kini possesses the necessary elements to capture significant market share. The pain points of financial liquidity among Indonesian workers present a clear demand for EWA solutions, suggesting that Kini has substantial growth room.

Moreover, partnering with East Ventures, known for its rigorous investment standards, enhances the credibility and potential scale of Kini's operations. Their involvement can also accelerate product development and partnership opportunities, vital for success in the fintech space.

Kini’s innovative product, which enables early wage access and facilitates bill payments, is indicative of its ability to provide tangible value to users. The rapid onboarding of clients and agreements with major corporations point towards a sustainable business model that can expand its user base significantly.

Considering all factors, including talent acquisition, market demand, and investor backing, we believe that Kini represents a promising investment with the potential to deliver strong returns while addressing critical financial needs in Indonesia.

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