Xendit, our payments platform company, came to life with a pivot.

The year was 2016, and we, along with our cofounders, Juan Gonzalez and Bo Chen, were working out of a small home office in Jakarta. Our goal was to develop a friction-free way for people in Southeast Asia to digitally transfer money, starting with our own country of Indonesia, where citizens are much more likely to have a cell phone than a bank account or a credit card. Looking to U.S. start-ups for inspiration, we first built a product that would allow individuals to exchange funds—something like Venmo but with more privacy. We then rolled out a simple business-to-consumer interface—a sort of pared-down version of Shopify—designed to help very small merchants, whether they were selling through traditional bazaars or on Instagram.

Uptake was slower than we had hoped, however, and we soon realized that we were putting the cart before the horse. Apps like our initial ones couldn’t be successful without an infrastructure for digital transactions and banking. We’d already built an internal system to ensure that our incoming and outgoing payments could be quick and seamless. Then came the brainstorm: Why not offer that service externally to speed transactions from bank to business and from business to business, easing a significant challenge for enterprises of all sizes in the region? In one weekend we took our proprietary system to market and set Xendit on a new, more successful trajectory.

In the years since, we’ve maintained month-over-month revenue growth of more than 10% and expanded from a few dozen employees to more than 1,000 distributed around the world. We now serve customers in the Philippines as well as Indonesia, and we’re eyeing other markets in the region. And in our latest funding round, backed by investors that include Accel, Amasia, Tiger Global Management, and Goat Capital, we achieved a valuation of more than $1 billion.

Still, we believe that we’re just getting started. And we’re applying the lessons we learned in our earliest years—know your market, stay nimble, prioritize talent and culture—to new challenges, from the Covid-19 pandemic to the war in Ukraine. Our ethos is to move fast but thoughtfully, working product by product and country by country, to build and strengthen Southeast Asia’s digital economy.

How We Began

Though we both have deep roots in Indonesia, we’ve also spent lots of time abroad. Moses has lived in Singapore, Malaysia, Australia, and the United States and earned his undergraduate degree from the University of New South Wales and his MBA from the University of California, Berkeley. Tessa, too, studied in the United States, at Syracuse University, and in Australia, at the University of Sydney. We were introduced by mutual friends back in Jakarta and decided, with Juan and Bo, to partner on Xendit.

The original idea for the company came from a college friend of Moses. As a South Sudanese guy studying in Australia, he worked three jobs to send money home to his family, but that was a slow and expensive undertaking. We started thinking about how we could use technology to make payments easier in the developing world. Indonesia seemed like a natural place to start. It is not only our homeland and home base but also the largest economy in a region where, although 70% of the 580 million people are online, U.S. companies have struggled mightily to gain traction.

Happily, we found an early supporter in Justin Kan, a cofounder of Twitch and Goat Capital and a former partner at Y Combinator (YC), who has relatives in the country and could see both its challenges (it’s a nation of more than 17,000 islands, after all) and the opportunity it presented for a fintech company led by people who knew it well and would invest the time to learn even more. Xendit also became the first Indonesian company accepted to the prestigious YC start-up incubator, where our team mapped out exactly what we wanted the company to do and what our business model would be. We were surrounded by other start-up founders posting 20% week-on-week growth and signing deals while we were still figuring ourselves out. But we learned a great deal from the experience, and we were up and running in Jakarta before the program ended.

From the beginning we looked to ease the biggest fintech pain points we could find. Once we learned that it was not the C2C or C2B/B2C but the more fundamental B2B transactions we needed to facilitate—allowing banks and companies to process multiple payments simultaneously rather than requiring that they happen one by one—we were off to the races.

That’s not to say we didn’t have mixed feelings about shifting away from our initial product ideas. Our Venmo-like service had gained 200,000 users in four months. But a Berkeley professor once told Moses that he should pursue a start-up idea only if it would one day be worth $1 billion. We decided—presciently, it now seems—that our payments infrastructure idea could be it.

Two other companies were already trying to offer the same service to corporate and start-up customers in Indonesia, but frankly, their technology wasn’t as good as ours, and they levied additional sign-up and cancellation fees. Our application programming interface was easier to integrate and less expensive, making it a more attractive proposition for business buyers.

Weathering the Pandemic

Of course, like any other start-up, we faced big challenges even after our pivot. Initially our systems weren’t as robust and reliable as they are now, so when we started seeing 10% monthly transaction growth, we encountered some hiccups. For example, when construction on the main road of Jakarta destroyed our leased data lines to our bank, our payment processing briefly went down. The same thing happened when widespread flooding in the city halted big-bank operations. The house that served as our start-up office often suffered electricity failures, and the backup generator would run out of petrol if the blackout went on too long. But because we operate from the cloud and had built redundancy into our systems, we were able to work around all those issues. And our customers stuck with us; Xendit was too useful to give up. We appreciated their loyalty, kept improving, and were soon capable of processing 100-plus simultaneous transactions.

Tessa Wijaya and Moses Lo at a Xendit off-site in Bali. Nyimas Laula

Then Covid-19 hit. At that point, in early 2020, a sizable chunk of our business was from travel industry customers—agencies and airlines. Owing to pandemic travel restrictions, those transactions and our associated fee revenues fell off overnight. Our response was to treat the crisis the way a Formula 1 driver navigates a difficult curve on a competitive raceway: First slow down a little to plan the approach. For us, this rethink included simple things such as renegotiating contracts with banks to bring costs down. Forty members of our senior team took voluntary pay cuts. We also thought about which industries were poised for greater growth in the coming years—gaming, crypto, online retail, lending, real estate, and small-business remittances, for example—and developed plans for targeting those sectors. Then, just as the Formula 1 driver begins accelerating at the start of the curve to propel the car out of it, we went full throttle to achieve our revised goals, doubling our workforce, adding new customers and business lines such as e-commerce and mutual funds, and investing to scale them up quickly. We also launched a lending business, underwriting credit risk for trusted customers who needed help getting through the most difficult months of the pandemic. Within nine months our revenues were not just back to where they had been but reaching new heights. In fact, by the end of 2020 we’d more than quintupled our total payment volume. We now serve 3,000 businesses in more than 20 sectors, from individual gig workers and digital-first start-ups to mom-and-pop shops and big brick-and-mortar enterprises.

By 2021 we were ready for international expansion, but only after the same kind of due diligence we’d done to understand our home market. We were hearing from regional customers such as Grab (the Uber of Southeast Asia), Ninja Van (a logistics company), and ShopBack (e-commerce) that a big problem in the Philippines was that its banks lacked an ACH transfer, or debiting, function. So we set out to fix it. We went to each and every Filipino bank and persuaded its leaders to let us build a debit system that could link to Xendit’s other products. It’s perhaps no surprise that we’re now one of the top B2B payment platforms in the Philippines, with direct debit as our top-selling product. Yes, part of our vision is to transfer the fintech that works well in one country to others in Southeast Asia if it’s helpful to customers there. But we also want to pave roads to meet the specific needs of each new market we enter.

A Diversity of Talent

To work this way takes talent, and we’ve been very deliberate about acquiring and developing it. Our team is geographically dispersed, with offices in Indonesia, Singapore, Malaysia, and the Philippines. That may seem normal now, but before Covid many observers asked us how we expected to run a successful business in Asia without face-to-face interaction. We’ve managed to do just that with creative but careful hiring and a unifying culture. In the early days, before the Southeast Asian start-up scene existed, we targeted fresh college graduates—the next generation of regional talent—who were willing to take a risk on a new venture and told them to spread the word. We looked for raw talent or potential rather than existing expertise. Our pitch was this: We’re a new concept and company, but we promise you’ll have a great experience. It seems that employees did and still do: We’re proud to have earned a five-star rating from Glassdoor.

As we’ve grown, we’ve looked further afield for people while also refining the vetting process. For example, anyone who joins Xendit first does a trial day with us, working with current employees on a real problem that we’re facing. That helps us see what people can do and how they operate—and vice versa—which seems wise before committing to any person or company. In fact, that process, which we implemented in 2016, has boosted our ability to predict a new hire’s potential for success from 75% to 95%. Some candidates self-select out, but those who embrace and thrive in the trial almost always prove to be great fits.

We’ve also worked to bring more women into our male-dominated industry and to support the growth of female technologists. Flexible and remote work is one draw for them, of course, but so is the offer of training, mentoring, development, and promotion into leadership positions, with Tessa and other senior leaders serving as role models. One case that sticks with both of us is the single mother who, a couple of years after she joined our team, wrote us a note explaining that Xendit was the first employer to have offered her a path toward upward mobility and a feeling of love from and for her colleagues.

To unite the diverse group of far-flung Xendit team members, we’ve also intentionally built a unique culture focused on quality, transparency, community, and purpose. We aim for the highest standards, in everything from code to customer service. To that end, we’re open about all our processes. For example, like Amazon, we’ve created a document outlining how we build software. When employees do something new, they write down how they did it so that others can learn. That way, no matter how recently employees have come on board or how far away from our Jakarta headquarters they’re located, they can access the resources they need to do their jobs well.

We also care about one another on a human level—a fact that was painfully driven home as we watched team members based in Ukraine shelter from Russian bombs, share dwindling food supplies with their pets, and ultimately flee to safer areas. Of course we are doing everything we can to help.

Finally, especially in troubled times, we at Xendit align around the mission of having a positive impact on our region and the world, developing Southeast Asia’s digital economy to boost business and employment growth. We really do believe that technology can change people’s lives for the better.

An Exciting Future

Going forward, our strategy is three-pronged. First, we will continue to expand regionally—perhaps to Thailand, Malaysia, and Vietnam—but we’ll always follow where customers pull us. What do they need that doesn’t yet exist but that we can help build? Second, we’ll move beyond payments to other value-added services, such as the lending business we’ve already started in Indonesia. Third, we will deliver for the small and medium-size enterprises that truly depend on Xendit to thrive and scale up.

With strong global VC backing, we intend to keep reinvesting in new markets, products, and business lines so that we can seize the biggest and best opportunities. Experts predict that the Southeast Asian digital economy will be worth more than $300 billion by 2025, so we expect to face more competition in the coming years. But we think we’ve positioned ourselves well to both drive and benefit from that growth.

Six years ago Xendit was an idea. Five years ago it was a start-up about to pivot. Today we process more than 150 million transactions, worth $12 billion, annually. And we all have stories about how we’ve helped other businesses grow in that time. Tessa’s favorite might be the cake shop, now famous on Instagram, that joined our fold and saw its revenues jump 90% and an attempted fraud thwarted. For Moses it might be the seven billboards he passed on a recent taxi ride from the Jakarta airport into the city. All seven featured Xendit customers. We’re excited about a future that will allow us to support thousands more.

A version of this article appeared in the July–August 2022 issue of Harvard Business Review.