MANILA -- Philippine e-commerce company Great Deals has raised $30 million as the pandemic sparks a boom in the country's digital economy.
The fresh capital will fund the construction of an automated warehouse that can handle a million transactions daily, and lays the groundwork for an overseas expansion that is set to begin in the next few years, Great Deals founder and CEO Steve Sy told Nikkei Asia.
The funding round was led by local logistics company Fast Group, whose investment will help Great Deals reduce shipping costs, a key issue for e-commerce companies operating in the Philippine archipelago.
Also joining the Series B round are private equity firms CVC Capital Partners and Navegar, which invested $12 million in the Series A round last year.
"We are preparing for the growth of the e-commerce industry in the Philippines," said Sy, who got his start selling mobile phone accessories and shoes in shopping malls before setting up his company in 2017, in an interview on Wednesday.
Great Deals operates mainly as an e-commerce service provider for over 300 brands spanning everything from local food groups San Miguel and Del Monte to multinational consumer brands such as Unilever and L'Oreal.
The company runs the brands' stores on e-commerce portals such as Lazada and Shopee and handles those brands' digital content and warehousing needs. It also partners with Singapore's Grab on its grocery shopping service in the Philippines via GrabMart.
"Technically, we are the one selling to the consumers ... not in our name, but in the name of the brand," Sy said.
Great Deals is among the few companies that have benefited from the pandemic. Its revenue surged to 4.4 billion pesos ($92 million) last year from 1 billion pesos in 2019, and the company aims to double that figure again this year.
The pandemic "is a silver lining for us. When we had a lockdown, it helped that people were buying online," Sy said.
Great Deals will also open warehouses in the central and southern Philippines this year, and will invest to boost its technological capabilities, Sy said.
The company's $30 million Series B round is a welcome development in the Philippines. Many startups have struggled to attract capital due to fierce competition with regional players. But investors say e-commerce and fintech will continue to be attractive segments in the market of around 110 million people.
According to iPrice Group, visits to online shopping sites in the Philippines jumped 21% in 2020, the second-highest growth in Southeast Asia after Singapore, which recorded a 35% increase.
Sy said the next fundraising round is aimed at financing Great Deals' regional expansion.
"In terms of looking at the vision of the company, definitely we would like to have an international IPO because we will [have] a regional play -- so not just in the Philippines," Sy said. The initial public offering could happen "maybe in three to four years."