Philippine Fintech Mynt hits US$2b valuation with US$300m funding round

PHILIPPINE fintech player Mynt, the group behind the GCash app, reached a valuation of US$2 billion after raising over US$300 million in funding led by New York-based private equity firms Warburg Pincus and Insight Partners.

Joining the funding round were Itai Tsiddon, the co-founder of Israeli unicorn Lightricks, and global venture capital firm Amplo Ventures, along with existing investors Globe Telecom, Ayala Corporation and Bow Wave Capital.

Mynt's unicorn status comes more than a year after the Philippines' first billion-dollar startup, Revolution Precrafted, collapsed. Mynt is seeking to accelerate its consumer lending business and introduce "buy now, pay later" (BNPL) products by the end of the year, buoyed by an online shopping boom. BNPL products allow customers to purchase goods and then pay for them in installments or after a certain period of time free of interest.

The online payments space is heating up. Players are amassing firepower and aggressively expanding their suite of financial services products that seek to reach South-east Asia's unbanked populace, hoping to win over shoppers in a market where people have limited access to credit cards. The region added 70 million new online shoppers since the start of the pandemic, according to an annual report by Facebook and Bain & Co.

Grab recently announced several new partnerships to increase the adoption of its BNPL service called PayLater, while the parent of Singapore-based BNPL player Atome, Advance.ai, raised US$200 million from investors including Warburg Pincus. Standard Chartered has announced it will provide US$500 million of financing to Atome.

Fintechs seek to use BNPL offerings to tap the scalability of micro-loans, hoping to bring consumers into their suite of financial services for cross-selling. Mynt offers credit, savings, insurance, loans and investments.

Assets under management (AUM) for its GSave product has grown to over 9 billion Philippine pesos (S$240 million), from 5 billion pesos in 2020, while its GInvest product has already captured 70 per cent of the domestic market of total UITF (unit investment trust fund) accounts. GInsure, GCash's microinsurance offering launched in 2020, accounts for one-third of all new insurance policies issued in the Philippines.

Through its wholly-owned subsidiary Fuse and other banking partners, Mynt offers credit to its users through its "trust and scoring platform" GCredit. It disburses over 1 billion pesos worth of loans each month, with 15 billion pesos worth having been disbursed as at June 2021, the company said. Mynt also has a cash loan product, GLoan, that allows qualified users to borrow up to 25,000 pesos, with repayment spread over 12 months.

Mynt, which also counts Jack Ma's Ant Group as its investor, hopes to reach 3 trillion pesos in gross transaction value, 3 times more than last year's record number. The company added it delivered positive Ebitda (earnings before interest, taxes, depreciation and amortisation) and net income in mid-2021.

Saurabh Agarwal, managing director of Warburg Pincus, said that this investment into Mynt marks the firm's belief in the "long-term prospects of the Philippines as one of the fastest-growing digital economies in the region".

He added that Mynt has a "dominant market position" in the Philippines and is "well-positioned".

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