US fund KKR, China’s Tencent Holdings and other backers of Voyager Innovations have pledged USD 120 million of fresh capital for the Philippine mobile payment company, which is set to run out of cash by middle of the year.
The new capital will provide a lifeline for Voyager, whose talks with new investors have been hit by delays, and allow it compete with Alibaba-backed Mynt at a time when the coronavirus pandemic is giving a fresh boost to digital financial services.
The financing will be the first since KKR, Tencent, IFC, and IFC Emerging Asia Fund jointly invested USD 215 million in Voyager in 2018, diluting Philippine telecom PLDT‘s stake to below 50%.
“This is also a recognition of the significant role that the Philippine financial technology industry can play in providing meaningful digital solutions to many of the crucial and very-human challenges that the Philippine community faces today,” the five Voyager investors said in a joint statement on Monday.
PLDT and Voyager Chairman Manuel Pangilinan last month said valuation issues were delaying talks with new investors, prompting existing shareholders to prepare for an interim funding.
“We’ve decided [to act] before they run out of cash, which is probably by the middle of the year, by June,” Pangilinan told reporters. “Before they hit the wall, we will provide the interim financing among ourselves.”
Voyager’s Paymaya mobile payment app competes directly with the GCash of Mynt, which is owned by Alibaba affiliate Ant Financial Services Group, Globe Telecom, and Philippine conglomerate Ayala Corp.
The competition in the market, which is dominated by cash, is poised to intensify after the Philippine central bank governor urged consumers to shift to digital transactions amid the pandemic.
“In light of the coronavirus pandemic, there is an advantage, no matter how small, for transactions to be done digitally than in cash,” Gov. Benjamin Diokno said last month.
GCash meanwhile urged the public “to use digital financial tools to reduce contact with potentially contaminated money.”
This article first appeared on Nikkei Asian Review. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei. 36Kr is KrASIA’s parent company.