Welcome back to our continuing conversation with ⁠Shilpa Gautam⁠, CFO of supply chain digitization and purchase financing platform ⁠AwanTunai. 

In the last episode, we talk about the recent progress AwanTunai has made with its Series B and what that means for its business. We also hear from Shilpa’s perspective as CFO how AwanTunai develops cost-effective risk management and scale. 

In part two, we delve deeper into Shilpa’s journey as a CFO, from joining the company at the forefront of the tech winter to winning awards at Davos, and her own mindset and approach to various aspects of building a company’s finance function, from hiring to controls and fundraising. 

TLDR and Highlights

Shilpa has had more than a decade of experience across audit, accounting, investment banking, lending, but nothing truly prepared her for her jump into AwanTunai

She became interested in the company’s approach to MSME lending in Indonesia, as well as when the company raised its Series A with IFC as a lead investor

Not long after she joined the company, the landscape rapidly shifted into a tough environment for fundraising.

This meant she had to accelerate her work of bringing in more structure and efficiency into the company’s finance operations, as well as prepare far earlier to fundraise for their Series B

Over the next two years, she helped the company close its Series B with global investors, grow their lending product 8x and become EBITDA positive, and maintain its world class risk management performance 

She later told this story of AwanTunai setting new standards for financial inclusion as part of a global competition with 6000 startups from 150 countries, and won the finals with her pitch at Davos in January this year. 

Here are three key learnings from her experience:

On hiring: Being the first CFO of AwanTunai, Shilpa had to map out who she would be working with and who else she needed to bring on. In some cases she had to train employees on FP&A and controls, in other cases (like fundraising), she had to bring in new people to fill in skills gaps. 

“At the risk of sounding like a geek, I created a capabilities map for the teams. What systems do we have in place? What processes do we have in place?…Given that I needed to fundraise and I was the first CFO of AwanTunai, one of the things I did was I hired a very competent financial controller that I could trust. And she was a great support to me so that I could run the fundraising process and build financial reporting to the best of standards.”

On controls: For an early finance team, it was inevitable that the CFO would have to roll up their sleeves on developing authorization controls as well as reporting discipline. However, this is only a temporary solution and it is important long-term to bring in more leaders to take charge of internal controls. 

“Earlier this year, we hired a head of internal audit whose job is to create these controls across the right divisions, be it sales, treasury, or product…we have very senior leaders from OCBC, from HSBC who’ve joined us. And they have been very instrumental in setting up this control framework.”

On fundraising: It was important for Shilpa to build relationships with investors, and this includes investors who had to pass on the company. In one case, one investor was able to introduce them to another investor who eventually invested in the company.

“One last thing, which I personally found very useful, was building relationships along the way…building these relationships with the right investors so that they become advocates of your companies to other investors.”

Timestamps

(00:03) Highlights;

(00:56) Growing as a Leader in AwanTunai;

(07:33) CFO’s Approach to Hiring, Controls, and Fundraising;

(14:04) In the Orange Corner;

(16:53) What Keeps Shilpa Going;

(18:46) Rapid Fire Round;

Transcript

Growing as a Leader in AwanTunai

Paulo J: I wanted to start first with Davos, which is what you had mentioned in our last episode that really is a sign of AwanTunai’s global recognition in terms of the work that it’s doing. Maybe you can share a little bit more about that whole experience, how you represented the company, and what has been your takeaway from all that?

Shilpa: I will answer the first part, which is, as a CFO, you typically don’t see representation in these competitions. I was actually just surrounded by CEOs and entrepreneurs. 

I owe it to Dino for sending me to Davos, sending me to COP28. So how I got to Davos was through a competition called Founders Games, which is organized by Webbit Foundation, a group of seasoned investors who invite impactful startups globally to come and compete. 

So in 2023, there were 6,000 startups invited to Founders Games from across 150 countries. And through various rounds, we were invited to Davos, where the finals were being held. So the top 12 companies selected from COP28 were to come to Davos, and AwanTunai won Founders Games, which was a fantastic moment for me. 

It really felt like all the hard work Dino, Rama, and the whole AwanTunai team had put in. This is really something. We’re really doing something to change lives or really bringing about impact, which is financial inclusion in Indonesia. And this is a textbook example for FinTech lenders globally. 

Davos was fantastic. When I was speaking, the audience was CEOs and prime ministers and ministers. And one of the prime ministers of a country came up to me and said, “I really like the passion with which you speak about AwanTunai, and congratulations on building such a beautiful startup.” 

So yeah, credit to Dino and Rama for this. And it was really my honor being at Davos.

Paulo J: Must’ve been quite the ride. It wasn’t just like a one-time thing. It was a whole process that you mentioned, several different types of formats that you had to go through and eventually make it to Davos for the finals and win. So congrats again on that. 

I think it was just one of many ways, where you already have several years of experience as a finance professional, but I think it’s quite interesting how you’ve also been trying to push yourself as well. 

You mentioned off the record that you had not had a really bad experience in terms of pitching on stage. And this is one of those really big experiences. What was it like pitching in front of such an audience? And what’s a learning for you professionally in terms of pitching?

Shilpa: In terms of pitching, obviously, it’s quite nerve-wracking, right? 

Firstly, you’re not just in some random room. You’re in Davos. You’re at the World Economic Forum. We’ve got leaders globally watching you. And it is quite nerve-wracking, but I think staying true to your mission and the conviction that you have in oneself, that you’re bringing some positive impact, not only to the company but to Indonesia, that is something which I was very proud of. 

I also had the pleasure of meeting so many other startup founders. And these were not like Series A, Series B, these were like scale-ups and unicorns. And I think one thing that they all had was humility, right? And the fact that we’ve built something fantastic, but then there’s still lots more work to be done. 

So I think one of the learnings from this experience was, surround yourselves with people who inspire you and continue doing what you’re doing with 100 percent passion, integrity, and conviction.

Paulo J: I wanted to ask also apart from this whole Davos experience, what are other ways in which, you know, working at AwanTunai has really developed you as a finance professional?

Shilpa: I’ve had the perfect opportunity here to put all my past experience into practical use in AwanTunai.

So I think in terms of the impact I have given to AwanTunai as well as the other way around, I think the first impact is I gave the CEO, Dino, a trusted partner that allowed him to make the decisions and run the business with the finance lens, that there is a financial impact for every decision. 

And every CEO needs a good CFO to help translate that for me. I think that was one of the key things where I saw impact on the company, but at the same time, there was a lot of learning for me, right? Every recommendation I made to Dino meant something financially and strategically, in terms of the growth of the company. 

And I think I put in order a robust finance function, right? So I reviewed and I restructured the finance function and started to work through each of the issues that existed in the finance team, starting from the most critical down to the not so critical. So this is something I’ve not done in my past roles in professional services or as a banker. So this was a lot of a learning curve for me personally as well. 

Also, given that we are a peer-to-peer lender, there are a lot of regulations when it comes to lending. Being compliant with those regulations was something which I have learned since joining AwanTunai, making sure that business risks are addressed and controls were put in place, for maybe putting, keeping expenses down, tracking monthly performance to highlight issues before they actually even happened. So that comes from my audit background in terms of control process. 

And also where I’ve learned the most was running the fundraise process, giving that time because before I joined, Dino was running that process. So I’ve given him that time to focus on the business, whereas I take the reins of fundraising. 

And I think also as an external finance professional, investors have someone to trust within the business, right? So investors care about transparency, truthfulness, consistent reporting, which is what I have hopefully given to the investors since I’ve joined AwanTunai.

CFO’s Approach to Hiring, Controls, and Fundraising

Paulo J: You mentioned a couple of things there, which I wanted to get into one is I think the importance of really building out the finance function and finding the right talent, which you’ve also mentioned in the previous episode. What has been the biggest learning in terms of building that team and growing that finance function for AwanTunai?\

Shilpa: I went back to basics for this bit. When I joined in, I interviewed members of the finance team to assess their competencies and aspirations. In every team, there are the thinkers and the doers. And you need a good mix of both of them. 

At the risk of sounding like a geek, I created a capabilities map for the teams. What systems do we have in place? What processes do we have in place? 

I coached the finance team on FP&A, partnering with other units such as product sales, and keeping in mind that every part of the organization has a financial impact. So it’s not just for me as a CFO to realize that, but also my team, to the junior most team members who should understand that, so the financial impact of each decision. 

Then I’ve trained the team on soft skills needed to perform their day-to-day tasks, [00:09:00] but also, in terms of how to deal with diligence processes of investors, because DD processes, some can be as short as one month, some can be as long as two to three months. So managing that in addition to your BAU, right? Because all this process takes time away from your BAU work. 

And given that I needed to fundraise and I was the first CFO of AwanTunai, one of the things I did was I hired a very competent financial controller that I could trust. And she was a great support to me so that I could run the fundraising process and build financial reporting to the best of standards. Also, when I joined, finances were Excel-based. So there was obviously a lack of controls, right? So I implemented the rollout of NetSuite to automate certain processes, create simple controls such as even make a check of controls, right? And work towards creating an efficient and transparent financial reporting structure.

Paulo J: I think a recurring theme has been recognizing the financial impact of every aspect of the business, having those controls in place. You did talk about the kind of technology infrastructure you plugged in to enforce those controls. But from an organizational perspective and people perspective, how do you enforce those controls and try to maintain that discipline within the organization?

Shilpa: So when controls are lapsing, you have a warning system, right? So for treasury controls, there needs to be an authorization matrix. So it’s very hard to break that authorization matrix because at least that’s external. With banks, if someone wants to make a payment above a certain threshold, they’re not able to.

[For] other internal controls, in terms of completion of accounting entries, the timing of creation of those accounting entries — this is something I have to sit down, roll up my sleeves, look at it on a granular basis, and create these controls. 

And one thing for CFOs to recognize is you can’t do everything at all times and be there throughout, right? So you have to hire the right talent. So earlier this year, we hired a head of internal audit whose job is to create these controls across the right divisions, be it sales, be it treasury, be it product. 

AwanTunai has always been lucky. The right talent wants to join us. So we have very senior leaders from OCBC, from HSBC who’ve joined us. And they have been very instrumental in setting up this control framework.

Paulo J: I think that’s certainly paid off in terms of what you’ve been trying to build as well as what you’ve been trying to sell to investors, to build that supply of capital as you’ve mentioned. 

For our listeners out there, and I think your journey so far in AwanTunai has really been shaped by bringing it from Series A to Series B, like any big advice or take away from the whole fundraising process. I know you’ve talked about it at length, but if there’s anything that you’ve taken away that you want to bring into this, into future fundraisers, what is that one thing?

Shilpa: Sure. Maybe there’s more than one thing, right? A couple of things I’ll touch upon. 

So look, fundraising is a very time and energy-consuming process. So I think ensuring that you engage with the right investors is of paramount importance. Back in the day of cheap equity, where investors were just valuing the companies based on TPVs and disbursements…we were very contrarian in that approach, right? 

Some of the takeaways would be first, choosing the right investors. These are investors who are aligned with management vision and will not force the founding team to change their strategy to match what their internal return targets are, right? I think many investors I came across just wanted us to [scale] disbursements without solving for risk. So we’ve learned to have the courage to walk away from these investors. 

The second aspect is demonstrating growth and your business model and being able to articulate what problems are you solving for and showing them the path to profitability. It’s the importance of understanding and demonstrating the growth metrics, the sales metrics, the efficiency matrix to the investors, and the investors want to see that your business is not only growing, but it has a clear path to sustainable growth and profitability. 

One more thing would be to not be stuck up on valuation. A lot of startups in the past have raised at some crazy valuations only to go down. And I think you need to put the business before your ego and, at the same time, not give up on valuation. But don’t make that a sticking point. 

One last thing, which I personally found very useful, was building relationships along the way. So one interesting example is we, I was pitching to this fund, and they said, look, we really like this business, but we can’t invest. However, I know another investor I could introduce you to, maybe things may work out. And that investor actually went on to be one of the investors in the series B round. So building these relationships with the right investors so that they become advocates of your companies to other investors. That is very important along the process.

In the Orange Corner

Paulo J: And speaking of relationships, I wanted to move into our “in the orange” corner. And I think since you, as a CFO, as you mentioned in our first part one, was introduced to Avantunai through Insignia. I was curious to know as well, what that relationship has been like working with Insignia also as an investor and how that has impacted your own role as CFO as well.

Shilpa: Insignia has been with Avantunai right from the seed stage. So Yinglan has been a massive supporter of Avantunai, and thank you very much for that. 

Insignia has stuck with us through thick and thin. During the pandemic, a lot of business lending businesses saw a lot of losses, but we were actually able to work on these losses quite quickly, and we were able to pivot our lending strategy from merchant lending to supplier lending. And Insignia has always been supportive. 

One thing I can personally say is, Insignia is always looking out for us in terms of introducing us to strategic partners, be it lenders, be it investors, and every time Yinglan has gone to an event to talk about Insignia, I’ve had some reverse inquiries saying, “Hey, we met Yinglan at this event, and we’d like to understand more about Awantunai,” either as an investor, as a lender, or even somewhere like an FX provider or talent. 

So Insignia has been super helpful to AwanTunai, not just since the beginning, but even with me as a CFO as I was preparing for the fundraise. So I think I did sit down with the Insignia team to build out, “Okay, this is my fundraising strategy. This is what our go-to-market strategy would be.” And obviously, Insignia has been nothing but super kind and super helpful to us.

What Keeps Shilpa Going 

Paulo J: And I hope this podcast actually also reaches the right people. If you are interested in having a deeper conversation with Shilpa about AwanTunai, don’t be afraid to reach out to her on LinkedIn as well. We’ll link her profile there for you guys to connect. 

And we’ve talked a lot at the top of this conversation about the impact that you’re making for Indonesian SMEs and the kind of change that you’re bringing into the economy. For you as a CFO, what has been the most fulfilling aspect, across the different roles that you’ve mentioned in our part one, of working on AwanTunai’s mission?

Shilpa: AwanTunai’s mission is to bring financing without collateral to the SMEs in Indonesia. And interestingly, that has not been achieved anywhere in the world at scale. So we are helping the banking industry access underbanked markets, and we are acting as the asset origination arm of such banks in Indonesia. 

I think the fact that we’re able to effectively lend without any collateral. This is a step in the direction which opens up access to SME banking for a lot of other fintech lenders, because we’ve seen other fintech lenders trying to copy a product, and imitation is the best form of flattery. 

So our mission is to bring prosperity, improve the lives of the SME population in Indonesia. Yeah. And, of course, we can’t do it alone. So we have built an army of partners, which is the Indonesian banks with private credit firms to bring about financial inclusion. And I get to be part of this change and bring about this positive impact.

Paulo J: If [our listeners are] looking to jump into startups, just as you did, really drawn by the mission and the impact and maybe even the technology as well, and how just like a one to nine company may be really pioneering something in an industry or a space, what advice do you have for them?

Shilpa: Look, it’s a sea change from the corporate world, right? And the banking world. So startups obviously operate very differently from established companies, right? So the culture of the startup and the challenge and the pace at which the startup operates is obviously very different to a company. 

I didn’t have my army of analysts and associates in AwanTunai that I used to have in banking. So I think one is don’t be afraid to roll up your sleeves and do the job yourself. You have to wear many hats, which I’ve touched upon earlier in the episode. 

When you’re moving to a startup, learn about the industry, and don’t just go in blind and if you have made a wrong decision, get yourself out of that soon and join a startup, which really, you know appeals to you and can put your past experience into the right practical use, which is what I have done. 

And I think as finance professionals in startups, It’s not just about the company, but it’s also about the founders, the solid investors, the mission that the startup is looking to bring. So I think all that needs to be taken into consideration.

Paulo J: And circling back to your first answer, really playing to your strengths leveraging that background that you have to bring something new into the company you’re joining.