Gajiku Snags 16 Billion Rupiah Seed Funding

The earned wage access (EWA) and HR platform, Gajiku, announced an early-stage investment worth of $1.1 million (approximately 16 billion IDR). This round was led by AC Ventures, with the participation of Agung Ventures, Monk's Hill Ventures Scouts Program, Sampoerna, and several Indonesian angel investors.

The fresh money will be used for product, sales and business development to bring in new customers, focus on large companies, and increase the number of employees across all functions.

The startup was founded in January 2021 by several founders, including Sherman Tanuwidjaja (CEO), with expertise in developing technology focused HR solutions for large clients including Temasek; and Herry Gunawan (CTO), who was the former Head of Engineering at Ruangguru and Lead Engineer at Tokopedia.

The platform

Gajiku is a payroll and employee management solution provider that enables employees to access on-demand payroll through an employer-centric approach. Gajiku offers a complete suite of employee management processes for attendance, payroll disbursement, and KPI tracking, helping employers digitize their human capital and accounting operations.

Companies generally work with large corporations, such as large retail and manufacturing companies with over 1,500 employees per company in average. 90% of employees registered at Gajiku transact at least once a month through partnerships with conglomerates and Indonesian companies.

Gajiku is usually used by labor-intensive companies that employ thousands of blue-collar workers, most of whom are considered unbanked and may work in informal settings. Low financial literacy among Indonesian blue-collar workers has made them particularly vulnerable to moneylenders and other predatory lenders.

These workers are likely to live from paycheck to paycheck or possible to disappear from the workplace due to immense financial stress. By offering Gajiku's on-demand payroll services, employers can provide a lifesaver for employees, helping them relieve financial stress and reduce employee turnover.

By combining access to earned wages with human resources and financial services, Gajiku is able to provide a complete range of services that increase business efficiency, reduce employee turnover, and provide financial well-being for the Indonesian working class.

“Indonesia's blue-collar workforce has enormous potential, when assisted with the right tools and opportunities to develop. With more businesses putting Indonesia as part of a global supply chain, we are working with employers to improve employee management, while ensuring that their employees are in the best financial position to succeed,” Gajiku's Co-founder and CEO, Sherman Tanuwidjaja said in an official statement, Thursday (27/1).

AC Ventures' Managing Partner, Adrian Li added, considering the Indonesian workers often sign informal agreements, employee management is business' top priority to increase efficiency and reducing turnover.

He believes that Gajiku's company-centric approach will enable employers to positively impact the majority of employees through access to early wages (EWA) and other financial services possibilities. “We are very excited to support the Gajiku team as they change the way for managing employees in Indonesia,” Li said.

EWA's penetration

In Indonesia, there are several startups that specifically provide EWA solutions, including GajiGesa, Gigacover, wagely, KoinGaji (from KoinWorks), and HaloGaji (from Halofina). The EWA concept is an adoption of similar solutions that have previously been present in developed countries.

Its existence most likely due to money as the main source of stress in Indonesia, citing the Health Living Index published by AIA. Household finances cause Indonesians more stress than work, relationships, or even physical health.

Another global survey by PwC in 2019 found that 67% of workers reported struggling with financial stress, resulting more than two-thirds of the working population are prone to migraines, depression and anxiety. Many studies have highlighted the effects of employee financial stress on business performance.

According to PwC, workers spend three or more hours per week focusing on financial matters rather than their work. Of the employees who reported financial stress, 12% lost their jobs because of the problem, and 31% felt their productivity was affected. One of three workers admit to being less productive at work because of financial stress.

PwC estimates for a company with 10,000 workers, all these financial stress-related problems could cost up to $3.3 million in one year.

In Indonesia alone, the lower middle class workers still dominate the working class. The World Bank noted that out of a total of 85 million income recipients which include employees, casual workers, and self-employed, only 13 million workers or 15% have enough income to support a middle class life with four family members.

Of this group, only 3.5 million or 4% of workers with middle-class income while enjoying full social benefits and having permanent employee status.

–Original article is in Indonesian, translated by Kristin Siagian