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Finance

Ant-backed Philippine fintech Mynt targets 'double unicorn' status

GCash mobile wallet operator seeking $2bn valuation in next fundraising

Mynt, the startup behind the popular GCash financial services app, aims to become the Philippines' most valuable fintech company. (Screenshot from GCash's YouTube page)

MANILA -- Philippine fintech player Mynt aims to more than double its valuation to $2 billion in its future fundraising, a top executive told Nikkei Asia, a level that would make the Ant Group-backed payment provider the country's most valuable fintech company.

Mynt, the group behind the popular GCash app, closed a $175 million funding round in January that valued the company at nearly $1 billion. It has added 11 million users since then and is aiming to boost its financial firepower as competition from traditional banks and other digital challengers heats up.

"Today, we are looking at becoming a double unicorn. We are talking about [a] $2 billion [valuation]," Chief Commercial Officer Frederic Levy said in an interview last week. "That's the next step for us."

Mynt is in talks with existing and prospective shareholders, according to Levy. "Clearly, we are very much open to new investors who would be interested to work with us. And we are discussing with a lot of people," he said.

Levy did not give details on the timetable for future funding rounds, but Mynt Chief Executive Martha Sazon told Nikkei in January that the company "could open up another round this year."

The ambitious target is just the latest sign of how the fight is heating up between traditional lenders and digital startups like Mynt, KKR-funded Paymaya and Grab, with each camp increasingly moving into the others' territory.

Mynt, for example, is more widely used for mobile payments, but it is increasingly moving into financial services like savings, credit, investments and insurance -- the bread and butter of conventional banks.

Meanwhile, BDO Unibank, the Philippines' largest lender, has introduced an e-wallet for existing bank customers that it plans to make available to the wider public.

If Mynt is able to reach its valuation target, it would be a welcome development for the Philippines. The country has yet to produce its own unicorn, even as its regional peers have incubated the likes of Singapore-based Grab and Indonesia's Gojek and Tokopedia.

Formally known as Globe Fintech Innovations, Mynt counts Globe Telecom, the country's mobile leader and GCash's original proprietor, and Jack Ma's Ant Group as its largest shareholders, with a 40% stake each. Philippine conglomerate Ayala has a 6% stake, and Bow Wave Capital Management, which invests in companies backed by Alibaba Group, has 14%.

The $2 billion valuation target is underpinned by pandemic-fueled growth. The company now has 44 million registered users, from 33 million last year, as lengthy lockdowns forced millions to conduct transactions on their mobile phones. Mynt had just over 20 million users in 2019.

GCash is also on course to more than double the value of transactions on its app to more than 2 trillion pesos ($40 billion) this year.

"GCash [has] reached a certain critical size and we are not going to stop," Levy said.

That scale has helped GCash attract partners, a vital piece of its strategy. Rather than act as a direct provider, GCash serves as a platform for other companies to offer financial services.

"The number of people and partners who are approaching us now has drastically increased [in the last] 24 months" Levy said.

Malaysia's CIMB Bank and Singapore's Singlife, for instance, power GCash' savings and insurance offerings. Levy said GCash could also take a page from the playbook of Robinhood, the U.S. mobile stock and cryptocurrency trading app, for future offerings, and is enlisting more merchants for its GLife service, a de facto e-commerce portal.

"Everything happens on GCash app," Levy said.

But while the Philippines' low banking penetration of 30% offers opportunities for fintech, Levy also recognizes the challenges in a country still addicted to cash, where lack of confidence in digital services remain prevalent.

"The challenge is to change the people's mindset that financial services [are] only for the wealthy," Levy said. "How do you build a platform and make digital services more affordable, accessible and easy to understand?"

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