 Hello, everyone, and welcome to Entrepreneur Asia Pacific. Today we have Mr. Jacob Roth, co-founder and CEO of iConnect, a fintech firm based in Indonesia, was fourth most popular in a very beautiful country. And today we're going to talk about the journey of iConnect and as well as the journey of Jacob that about how he came about iConnect and what needs to be done in this part of the world. So welcome, Jacob. And thank you for joining us today this morning. You know, to start with the benefit of our audience, if you could just take us through what iConnect is all about and then we can take it from there. Yeah, great. Thanks, Sharrop. So iConnect is an Indonesian B2B fintech. We are a payments company and with the payments we focus on especially bill payments. So what is bill payments? Imagine everything that consumers need to pay on a regular basis. So that's at least once per month or sometimes even once per week, sometimes once per year. So it's sort of all kind of subscription payments prepaid and postpaid that consumers need to do on a regular basis. So that's basically where we've built technology around it and we work with both, you know, billers, which are utility companies, telcos, but even schools, property companies and so on who need to basically receive the money from their customers. And on the other side, we work with big e-wallets. We work with banks. We work with agent models, which is still popular use case in Indonesia, offline retail and the likes of debt to actually give them access to bill payments for their customers. So we see it ourselves as a network. It's a bit of, you know, the visa for bill payments, if you will, we're just connecting both slides and we build the technology around it. Okay. So, you know, I was just speeding up and I saw that, you know, the bill payment industry is around 160 billion in Indonesia, is that the figure? So that's a huge number. So are you the only fair or there are other players you have peers or the technology that you have bought them? How is it unique? Exactly. I mean, bills are already getting paid, right? Right now, it's not that we're inventing bill payments. But what we see in the market is that the way it's done right now, there's a lot of friction, money gets lost in between, both sides are not happy. I mentioned all the billers who need to collect money, you know, they're struggling, you know, cash payments is a big thing for them. I mean, it's their revenues basically that they're collecting. If there's late payments or outstanding payments or default payments that affects the business directly. And on the other hand, we want to make the journey much more easier for the consumer as well. Especially if you go beyond Jakarta towards tier B, tier C cities, some people literally still have to travel to go to an offline location and pay in cash. And they have to do that, you know, five, six, seven times per month. There's costs involved and so on. So it's already happening, but we believe we can actually through technology enable it for everyone involved and then make it a more frictionless experience. Yes, obviously everyone's being being even now, but that's the part, you know, the convenience part that we're bringing. So, you know, before going to something else, you know, right now with the COVID pandemic that, you know, that is affected across sectors, everyone. This is the moment which has brought a lot of validation to this kind of, your kind of, you know, innovation that is being brought about in the context that are in these payments. So how has been your experience during this past four, five months that, you know, have you seen the numbers going up or have you seen people more taking up, you know, adapting to the new payment system more? Yeah. No, I mean, I think the last couple of months have been definitely very impactful, not only in bill payments, but across. It's interesting because we have a holistic view of the landscape, right? We work with the billers and we also see the customer behavior. So let me start maybe from the customer behavior. We work with both offline and online platforms. So even if people still go to a retail or to a counter and pay the bills to, there's a good chance that we are behind that in facilitating that transaction. So we have actually the visibility across. And I mean, definitely we can say that the trend has been that there was a shift towards more online platforms and towards more digital transactions in that sense. Some of our partners almost overnight increased their volumes by 30% and more, which makes total sense, right? It's basically everything shifts more digital, you call them so on. So bill payments is definitely, I would say in that sense, even a big winner of that, right? I mean, we see in many areas that technology gets accelerated and leapfrogs a couple of years. And I would say bill payments is on the frontier of that. I've seen various reports, I think one from McKinsey and another one where bill payments was really listed always as a clear winner with clear upside of the current situation. But what's also interesting is on our biller side, we actually help with the accounts receivables. So what happens there is that they have traditionally relied on one or two channels. In some cases, even their own agents that still went from door to door and were knocking and so on. I mean, we work with a vast amount of billers. To give you an example, we work with the water station that is located somewhere in North Sumatra, very remote. It takes me longer to fly there than going from here to Singapore by plane. I mean, Indonesia is a huge country, right? And those guys, they were happy with just basically doing it the old school way. All of a sudden they woke up and they also realized that a KPI for them is how do we move cash collections digital? How can we partner with banks, with e-wallets? How can we enable our customers to use other channels? But they not necessarily have the technology or the resources or the knowledge. And that's where we come in as a specialized service provider to help them. And basically accelerate their speed to market. What would take them probably a year or two to build themselves? We can do it cheaper for them and we can do it much, much faster. Yeah. Yes, obviously. I mean, the situation has actually driven a lot of smaller businesses especially to adapt digital transformation as a way of life which people were not thinking so much right now. So it was a problem to make them understand why it is necessary for this to happen. And it's very interesting when you say that there were a couple of winners who were still going door to door, connecting and everything. I mean, just to give us a sense that obviously for Indonesia is a huge country with a lot of people. So why hasn't it been lagging so much? I mean, obviously there are other countries as well here in India also. We have those kind of situations in some places. But what would be the reason for Indonesia to still be the way you describe it? So I mean, it's great question. I think it's, as always, right? It's driven by a bit of lackancy. So it's just the way it's been for and it works. Why would you want to change it? But on the other hand, I think consumer adoption towards more digital channels like e-wallets and even having a big bank account is still a big challenge in Indonesia. That has come a long way. I've been in Indonesia now for eight years. I've seen the whole journey from the early days. I wasn't e-commerce before and so on. So I think Indonesia has come a very long way. And now we're almost at an inflection point where consumers actually trust digital channels and they trust digital payments and it's just accelerating. So I think there's more openness on both sides, both from the consumer side but also from the actually provider side and utility side to shift to more innovative channels. So is there something to do with the mentioned that 50 years ago, would you say that, you know, is that something that needs to be addressed in these countries like in their Indonesia and with part of the country's world? I definitely would agree. Yeah, so I think that's a big point. And I mean, what Indonesia has going, it's a very young country. 50% of the population are below 30 in terms of age. And I think what I see and I think that's how it starts is that that young generation is much more open to try out new things. And they're typically, especially in bill payments but even when it comes to e-commerce and all those other products is they're the ones who try it out. They're the ones who tell it's a very social country. So their shared experiences and so on. And they might even do it for the parents for the first couple of months, right? So whenever, like starting from phone recharge, which is a big popular use case, but even going up to all the other bill payments that have to happen, there might be the first ones who do it and they might then teach their parents to do it and then the parents know it and they tell their friends and they have their network and so on. And that's how it evolves typically. So trust is a big factor, but it's a very rewarding journey actually once you see it kicking off. Yeah, obviously it's a domino effect, you know, once it starts and it goes on and on and on. So, you know, I'll come before we go into anything else, Richard, I would want to come to your journey. You said that you were in e-commerce first, so tell me about yourself, you know, where did you start and how did you, you know, you're on your journey in a very short time. Great, so I'm originally from Berlin, from Germany, grown up there and I come from a business and management background in my studies. Then I started my career in investment banking, but that was shortly after the financial crisis. So to be honest, there wasn't really a lot of projects to be doing and I quickly changed to management consulting, working for BCG, mostly across Europe doing mostly financial and banking projects. And one day got a call from a little known company based out of Singapore called Blasada. They said they had a big vision, they wanted to build sort of an Amazon in Southeast Asia and they were looking for people who were adventurous enough, let's say, to come to this part of the world and help them out. And I think this was the opportunity of a lifetime. I didn't hesitate and jumped on the opportunity and became the managing director for Blasada in Indonesia. And basically, and that was early, that was 2013, very early days. So there was no unicorn yet in Indonesia to hold the digital wave, the startup wave. There was not much around at the time. And Indonesia was mostly known for different stuff at the time. So really early days and helped Blasada a couple of years to basically grow their business. I started a marketplace for them, which is basically the department that opens up the platform and allows third party merchants to come and sell on the platform as well. That meant I traveled a lot across Indonesia to, I mean, I was driving to Graphical Expansion at one time, spending a lot of time in Surabaya, in Medan, in Jogja and building the teams there and in the offices and so on on the ground. And it was really one of those hyper-cross fast-skill kind of things where on my first day I had a team of two people and got a pet on the shoulder and it's like you figured out and nine months later I had 300 people reporting to me across commercial vendor acquisition, key account management operations, product and all of this. So very busy time, but super exciting and did that until we got, we sold the company to Alibaba, which until today it's still the biggest acquisition of Alibaba outside of China. And that was the point where I decided I definitely fell in love with Indonesia. I wanted to stay here but I wanted to do something a bit more early stage and that's where the whole, as you mentioned, financial inclusion, fintech payments landscape really started to shape up and that's where I got together with my local co-founder who is Indonesian but actually had his own startup in India before, worked with Times Internet and then decided to come back to Jakarta because his family was here and all of this. And that's where we teamed up and we decided actually that we like payments and Wolf looked very deeply into what can be done at the time and then really figured out that bill payments is by far what we thought underserved segment and the most overlooked segment in the whole payments landscape. That's how we got started. So that was five years ago. Now are your connectors grown to a hundred people, two offices and still as exciting as they want, I would say. So how was the change in climate? How did you adjust to it coming from Berlin to Singapore and this part of the world? This is, the climate is quite different. So what's that like, did you find it difficult to adjust to that climate? A particular, what? I didn't understand that. You know, you come from Berlin and you know, this part of the world is, the climate is quite different, you know, the type of climate. How was your experience first step? I'm sure that by now you're used to it. Yeah, so it's, I mean, it's a funny story. Basically, Lazada said, you can more or less choose a country. You know, we're in seven markets in South Asia. We need people everywhere and they asked me what you prefer. So I thought about it for an hour. I called them back. I said, I would like to go to Jakarta. And they were like very, I mean, I remembered like yesterday the recruiter was super surprised. He was like, no one typically wants to go to Jakarta. Most people coming from this part of Europe, they'll see themselves in Singapore or somewhere else. But they didn't mind. They were like Jakarta is definitely the place that is the hardest to stuff for us. So if you want to go there, fine. I think for me it was really clear, right? Like, if I do this, I want to do it right. And Indonesia is the biggest market. I had a really good friend in Germany actually who's Indonesian. So he opened really up and told me a lot about the country and the people and opportunities. And even though I've been around with Lazara, I traveled all the countries in Southeast Asia and I basically helped the operations in Malaysia and Philippines and Vietnam. And I set up the office in Hong Kong for a couple of months. At any given stage, they asked me, do you want to move? I always said, no, no, Jakarta is home. So that was definitely the right call. And now it's really home. I mean, it's approaching 10 years. My wife is in a nation. We have a daughter. I'm picking up the language for you well. So definitely not gonna move for the foreseeable future, if that's for sure. That's true. Thank you. I see you enjoying yourself and good that year. So, you know, I'll come back to you. So you recently raised your PCDC fund. I thought of you. So tell me what your plan with the new funding and what new are we going to see that IoKinic is going to do in the near future? What changes are going to come in terms of strategy or technology that you're looking at? Yeah, I mean, for us, one thing is really clear. We definitely want to stay within bill payments. And we basically see that there's a lot of opportunity and there's still a lot of room to crawl. Number one is because when people think about bill payments, they typically think about phone recharge or electricity. And those are, without a doubt, big categories. But to give you an example, we have now more than 20 bill payment categories, right? So it's much more than that. It's basically also insurance. It's lending, loan payments. It's taxed what we just implemented here with the government to even some more exotic stuff like bill payments for schools, for instance, right? In Indonesia, there's 400,000 schools and parents still give their kids the money every month and they go to the counter in the school. So we have built a system that actually enables schools to go digital and collaborate with banks and similar thing with property and rent payments that we have done for student or maturities, for apartment complexes, whether that's the maintenance charges every month or even the rent payments. So that's what we all see under this big umbrella of bill payments, right? And just those two areas that I mentioned, they're fairly new for us. So we've learned a lot and we iterated our product much, much better, but there's still a long way even for us to go in that direction. I think that that's number one. The other thing is that the more, I mean, we now work with large banks on, for instance, that use our technology, some of the biggest banks in Indonesia on the other side, big billers, big lending institutions with like hundreds of thousands of customers and so on. The more we work with them together, the more actually ideas they bring forward to us, where they actually are very happy that someone really focuses dedicated on those areas. And what we have basically done is we started a new product line, what we call value-added solutions. So this goes much deeper than just the transactional network that I was mentioned in the beginning. This is actually helping very deeply like on financial reconciliation, on market insights, on competitor landscape for our biller partners, but for bill providers, it's like, how do I get visibility across all my channels on who owns me, which customer owes me money, which customer typically pays late? How can I remind them? Like, e-invoicing is something that we're looking in right now. Bill payments reminders is a product that we've built. So there's really a lot to be done there. And we've also started to realize that technology is very transferable and we've actually gotten first inquiries from companies in similar needs outside of Indonesia. So even that is a potential exciting path to go in the future. So as you can see, we're busy on all fronts. And yeah, we love what we're doing here. So as I see that you have plans to move beyond Indonesia as well with your solution, Professor. So yeah, we have evaluated a bit and we do see that this technology actually would really make a good impact in some other markets as well. We have, what's that? Which markets would those be? So basically markets that are sort of in, I mean, definitely I would say emerging markets, right? So definitely Southeast Asia, there's potential. Africa, I mean, it's super broad, but even there, again, as I said, as you mentioned, financial inclusion, yes, it's there. But some of the solutions that we do are pretty unique even in some other markets. We've gotten first inquiries from the Middle East now. So they want to re-ramp their entire core banking stack and they want to do more. So that's interesting, but at this stage we haven't really made the final conclusion yet. We're still evaluating. And I think if we do it, we'd want to do it right. So that's basically where we are. I think with the current round that we've raised, this is meant for Indonesia to focus more here for now. You know, I was just wondering that Pintek company, Pintek Solutions have a great potential to, you know, for collaborations with all other sectors, be it tech, be it, you know, property, be it any other vertical utility. Pintek is something which is kind of only present in each of them. So how do you see that happening for you in Indonesia? Do you see collaborations happening going forward, especially, you know, during these times of COVID, people have realized the potential of collaborating and not working in silos and, you know, work together to be in a women's situation. How do you see, what's your opinion on that? No, definitely. For us, it's a very big premise to cross through collaboration and partnership. That's very important. In fact, that's why we call ourselves an open network. So our API, our APIs are accessible to anywhere, you know, anyone can go to our website and they can get access to our API. So we don't restrict, we're very agnostic, right? Also when we work with big banks, we tell them, you know, we're gonna work with your competitors because we enable you behind the scenes on the technology side, you know? We're an enabler, so to speak. Some people, I haven't realized, but what we, for instance, what we do is, as you mentioned, startups is really important, right? So when it comes to education, which is a focus for us, we already do collaborate with edu-tech startups in the market. When it comes to property, we're currently having discussions with prop tech companies to collaborate. And in other use cases as well. So definitely, I mean, we are very open and I think this is the beauty of being a tech company and an infrastructure builder, is that you basically focus on the technology, you try to optimize as much as possible, you make it open, but you're building a very lean organization. Our goal is not to have a thousand people three years from now. Ideally, we stay very lean, but we work with everyone in the ecosystem. Yeah, obviously, being asset-flight is something that over a period of time, startups have understood that how important it is to be asset-flight because asset-having companies, especially in times like these, have really taken up a huge hit. So, you know, I think we mostly are done here, but before I let you go, I would want to really understand from you, because I mentioned that a lot of our audience, startup founders and expanding founders. So, at times like these, when everything seems like lost, but still you need to persevere and you need to go ahead. So what's your mantra about it and what would your message to a expanding startup founder? Yeah, you're absolutely right, right? I think we're in a fortunate situation, we're benefiting from it, but not everyone is as lucky as that. And I've seen, even from my personal network and friends and other startups that are in close touch, that they're facing a much, much harder time. But I think ultimately, what's important is to be very agile. It's a good test at the end of the day. Like everyone can build a company in good times when everything grows, but some of the best companies actually have been started or have early in their stage gone through a crisis and so on. I think that's where it really proves the founding team, it proves the management team. You go back to the drawing board, you reevaluate and all of this. And that's actually what I've seen at an impressive rate. A lot of companies in Indonesia, they managed to shift. They came out with new products, they come out with stuff that actually is now needed in the market and they have really not pivoted but kind of like had a different direction. Super quickly, I think that's actually quite impressive. And that's ultimately, I think what entrepreneurship boils down to, right? Even when you start a company and you say, we want to go in one direction, it's not always going that way. I mean, we have made our fair share of experience of debt. Even if things are good, if the economy is good, you still need to be agile, you still need to evaluate what works and what doesn't. So actually not that much has shaped as changed in the situation. The only problem that I see is a bit on the capital markets and on the funding side. I mean, that's a real restriction. I have seen that investors are getting a bit more restrictive, which is fair enough, right? They also, I mean, I understand where they're coming from. That's where, again, as a founder, you need to be very frugal with your resources. You basically probably, yeah, again, prioritize what's important for the business. But nevertheless, companies are getting funded. So again, this is, again, if you're an opportunity to actually set yourself apart and convince investors that you have a plan and you have a direction that makes sense. And funding is still available.