GCash, a Philippine-based company offering mobile wallet and payment services, announced on Jan 8 that it secured over USD 175 million in capital from Bow Wave, a New York-based investment firm, bringing its total valuation closer to USD 1 billion.
“This is a significant feat for the Philippines startup ecosystem especially the fintech space, given that the space has been really active for the past five years disrupting traditional financial services in the country,” said Elross Pangue, chief business developer at Manila-based Qwikwire, a startup that offers cross-border payment solutions for real estate brokers and property developers.
The news comes shortly after the Ant Group-backed firm saw a 254% year-on-year growth in transactions in 2020, hitting PHP 1 trillion (USD 20.8 billion) in transaction value and expanding its customer base to 33 million users, around 31% of the Philippines total population of 108 million.
“The pandemic has acted as a catalyst in highlighting the importance of digital finance in society today and with this investment from Bow Wave, we look forward to further living out our vision of finance for all, while enabling democratized access to payments and financial services for every Filipino,” said Martha Sazon, president and chief executive officer at Mynt, the fintech arm of Globe Telecom and operator of mobile wallet GCash.
Navigating a crowded fintech market
The Philippines’ mobile payments market is projected to surpass USD 15 billion by 2021, while the total transaction value is expected to grow by 16.4% to USD 27.64 billion by 2024, according to data research firm Statista.
The massive market potential has attracted a roster of players in the payments field, with PayMaya being the biggest competitor to GCash.
PayMaya, with a customer base of over 28 million, also received USD 120 million in additional funding from its major stakeholders, including US fund KKR, China’s tech giant Tencent Holdings and other investors from Voyager Innovations, as the firm was set to run out of cash in the middle of 2020.
Other notable names include PayPal, Indonesia’s ride-hailing unicorn Gojek-backed Coins.ph, and GrabPay.
“The country’s fintech space will continue to grow. Among different fintech verticals, areas like digital lending and open banking are poised to experience a boom in the next few years, while traditional financial services will be disrupted and will be forced to move their operations online,” said Pangue.