EWA meets BNPL: A smart play?

Hi readers,

I’ve been fortunate enough to never have to ask for a salary advance. Meanwhile, many Indonesian workers have fallen into a debt trap, with some even getting stuck in a vicious cycle of borrowing money just to repay previous loans.

This is where earned-wage access (EWA) startups come in. By partnering with businesses, EWA platforms allow employees to access their pay early, helping them avoid predatory lenders.

Many of these EWA firms emerged during the Covid-19 pandemic, when financial uncertainty was at its peak. The model has gained traction since then, with some EWA startups now serving hundreds of thousands of workers across various industries.

One such startup is Jakarta-based GajiGesa, which recently caught the eye of Kredivo. The buy now, pay later giant announced it is acquiring 100% of GajiGesa in a deal reportedly worth around US$12 million. The move signals how Kredivo’s ambitions go beyond BNPL and consumer credit.

Talks between the two companies began in March 2024, according to a source familiar with the matter. GajiGesa had been looking for partners to fund its salary disbursements, while Kredivo saw the acquisition as a strategic move to expand into B2B services.

But the bigger question is, what led GajiGesa to sell? Was it a strategic decision or a necessity?

-- Glenn Kaonang, journalist at Tech in Asia

Top stories this week

1?. Kredivo takes over GajiGesa in $12m deal: source ?????????

GajiGesa was understood to face challenges in scaling its EWA model, which relies heavily on employee-paid transaction fees.

2. Angkas shifts gears as Grab vies for PH motorcycle taxi crown ?????????

After surviving two regulatory shutdowns and a pandemic, Angkas faces a new hurdle with Grab-backed Move It.

3. How Thailand’s big banks shape – and stifle – fintech innovation ??????

Having heavily invested in digitalization, the six major banks could be limiting competition and innovation in startups.

4. Startup fraud in Asia may be blown out of proportion

While startup fraud is hogging the headlines, corporate fraud may be even more common.

5. Hot or not: what SEA investors are betting on and what they’re ignoring ???????

VC funding can be a leading indicator of where in the tech industry we’re going to see more spending and jobs.

6. Exit corporate, enter startup: a femhealth founder’s how-to guide

From muting weekend alerts to reframing fear of failure, here are practical steps to make the leap from corporate to startup.

7. Gibran Huzaifah addresses eFishery fraud scandal for the first time ???????

In an exclusive interview, the ex-CEO denied inflating financials for personal gain and apologized to staff and farmers.

8. 3 questions that matter more than degrees for startup hiring ???????

How a candidate answers them can reveal a lot about their attitude toward problem-solving.

9. Southeast Asian startups that raised funds over 18 months ago ?????

Common wisdom suggests that having at least 18 months of runway provides a sense of security for startups to continue shipping at full speed.

10. Asia layoff tracker: Job cuts hit TikTok, PropertyGuru ???????

Tech firms are dismissing staff to stay afloat as headwinds hit Asia. This layoff tracker is keeping tabs on marching orders.