Top 10 Unicorns In the Philippines

Top 10 Unicorns In the Philippines

There has been long-term talk in the Philippines about its first startup unicorn. But, of course, a startup reaching a valuation of $1 billion in Silicon Valley is a legendary Silicon Valley creation.

Startups thrive in the Philippines, but the country has produced a unicorn. That’s okay, though. Being a unicorn isn’t easy – they’re supposed to be rare.

The marketing-heavy Revolution Precrafted made a spurious ‘first unicorn’ claim in 2018. The company is a PR-crazy founder who seems to have gone underground, and Revolution never built or delivered many results. The Loch Ness monster, it seems this unicorn was just a colorful donkey.

Unicorn

Investors are always interested in unicorns.

Unicorns are startup companies whose value exceeds one billion dollars. Cowboy Ventures founder Aileen Lee coined this term in 2013. Unfortunately, several of those names on the list of books look missing, for example, Facebook and Amazon. These companies are priced at a great number, and their current position is very different from their last job.

However, unicorns are no longer said to as such when Facebook and Amazon both list and are sold on the stock market. Instead, unicorns are private companies only.

The global market for unicorn companies

Southeast Asia now has more unicorn startups than ever before, most of which are based in the most attractive and most developed markets in ASEAN, for example, Singapore and Indonesia, thanks to Sea (formerly Garena), which went public in October 2017.

Currently, China has more than 60 unicorn startups, a number that is increasing by the minute. E-commerce and fintech dominate the global market for unicorn startups. 

Some businesses come from Minicorns and some from Soonicorns. Today, Southeast Asia has 10 unicorn startups, making it one of the most beautiful goals for investors. 

Indonesia is the fourth country ranked by population, Malaysia, Singapore, the Philippines, and Vietnam – VNG (Vinagame).

1. Mynt

In its list of Southeast Asia’s 35 unicorn startups, Mynt, which runs the e-wallet GCash, was the only Philippine startup featured.

ASEAN Equity Research’s latest report, ASEAN Unicorns, Scaling New Heights, examines the top startups in Singapore, Malaysia, Indonesia, Thailand, Vietnam, and the Philippines.

Globe Telecom Inc. said the list identifies companies in many industries and countries with a value of over $1 billion or received at least $800 million in funding in the past year and shows strong market momentum.

Mynt has capitalized on these trends by changing its GCash service into a nifty app that includes e-commerce (GLife) and financial services (lending, insurance, saving, investing), the report states.

In addition to payments, remittances, loans, business solutions, and platforms, Mynt allows financial access for consumers and merchants.

A biased partnership fund managed by Bow Wave Capital Management invested in ASP Philippines LP in the middle of last year.

The company raised over $175 million in fresh capital from the company’s existing investors and Bow Wave, with the final tranches valued at close to $1 billion post-money.

Company overview

2. TaskUs 

Nasdaq has confirmed and backed TaskUs as a Philippine unicorn. Yet, an eerie silence envelops the Philippines as the first real unicorn is born despite their success. What’s going on? As a result of TaskUs’ success, the Philippines, and the Philippines’ outsourcing industry, have gained attention.

A childhood friend, Bryce Maddock, and a co-founder, Jaspar Weir, founded TaskUs in 2008. The company grew to a workforce of 27,500 in just 13 years, with a revenue of $500m and a net profit of $34m. Their customer service solutions have been used by companies like Facebook, Uber, and Coinbase. A $23 IPO price valuing TaskUs at approximately $2.8 billion was announced at the Nasdaq on Friday, 11 June.

Five days later, they tracked the share price at $31.50. It is now estimated that the two company founders are worth $400 million each.

TaskUs, today a global leader in business process outsourcing, was founded in Makati, the Philippines’ heartland of outsourcing.

Although the founders, Maddock and Weir, are US citizens, they spent some time in the Philippines. The local outsourcing community supported them. Although the company now employs 28,000 people in eight countries, it began in the Philippines, growing to roughly 10,000 people before growing internationally. Most of its personnel are still based in the ‘home nation.’

The startup growth and funding path of Task US were well-trodden. In 2015, Navegar funded $15m in their formative funding round. TaskUs was still a small firm at the time, but it had already landed high-quality customers and was on a rapid growth path. TaskUs, on the other hand, are usually profitable for a startup!

In late 2018, Task Us raised another important round of funding when Blackstone, one of the world’s largest investment companies with $440 billion in AUM, committed $250 million at a $500 million value. TaskUs’ IPO was led by Blackstone, which saw a 5x return on investment in less than three years.

After making clients like Uber, Groupon, Tinder, and HotelTonight – some of Silicon Valley’s most prominent companies – TaskUs saw rapid growth in its early days.

The company’s growth was financed by Navegar – a private fund based in Manila that invests only in Philippines-based companies. A team of experienced outsourcing veterans, Nori Poblador and Javier Infante, manage the fund.

Jaspar Weir and Bryce Maddock are not Filipinos. So what? Immigrants and foreigners make founders in Silicon Valley. Immigrants found five-fifths of the unicorns in the United States.

Sergey Brin, the founder of Google, is Russian, and Eduardo Saverin, the founder of Facebook, is Brazilian. Non-US citizens, including Elon Musk, founded Paypal. Stripe’s founding siblings, John and Patrick Collison are Irish, as is Jerry Yang, Yahoo’s founder. Foreigners founded Uber, WeWork, Slack, Palantir, and Calm, all in the United States.

TaskUs has gone public on its offices’ US technology, but who can blame them? Although the headquarters may not be registered in the Philippines, this is merely a technicality. Google, Facebook, Apple, and Stripe are all unsure about their true headquarters location. This is a common practice for global corporations.

Company overview

3. Great Deals E-Commerce

A leader in e-commerce for brands like Abbott, L’Oréal, and Unilever in the Philippines, Great Deals, was founded in 2014. Fast Group, one of the Philippines’ largest logistics firms, and CVC Capital Partners have led the startup, raising $30 million in Series B funding. Great Deals has also repaid Navigate, which led to Series A.

Rocket Equities reported on the transaction. It is the beginning of a long-term partnership for Fast Group, with more than 2,500 vehicles and 90,000 stores. In addition, the new capital will be used to build an automatic actualization center for Great Deals, which will help it expand outside of Metro Manila and deliver more Instant Commerce or delivery within an hour due to the sale.

Great Deals now only runs in the Philippines, but founder and CEO Steve Sy told TechCrunch that the company wants to expand regionally next year.

“The Fast Group sees a lot of synergies with Great Deals in growing capacity,” Fast Group president and chief executive officer William Chiongbian II said in a statement. We are honored to contribute to the expansion of Philippine e-commerce, which is largely reliant on a strong supply chain.”

Nestlé, Samsonite, GSK, Bayer, and Fila are Great Deals’ other customers. In addition to being an e-commerce distributor, Great Deals provides end-to-end services for companies, for example, digital content creation, marketing campaign coordination, and marketplace listing maintenance (Great Deals’ partners have Lazada, Shopee, Zalora, Zilingo, Shopify, and Magento).

Company overview

4. Kumu Holdings

The Philippines-based company announced today that it had raised $5 million in Series A funding. The funds will be used for new features and to expand the company.

Openspace Ventures, a Go-Jek early investor, led the round with Kickstart Ventures, ABS-CBN, Gobi-Core Philippines Fund, Summit Media, and Foxmont Capital Partners.

According to Kumu, media and entertainment apps have increased during the COVID-19 lockdown. As a result, over the time, the company released new features to meet societies’ demands, for example, churches and industry groups, for hosting online events.

Kumu claims to have three million registered users and 25,000 daily live streams, with an average daily usage of roughly one hour.

Five years ago, Kumu, founded by Roland Ros and Rexy Josh Dorado, intended to be a “super app” for Filipinos, live streaming, video chats, and gaming, with ambitions to online payments and e-commerce services. Kumu’s future feature is a live commerce platform that allows users to buy products while watching live streaming, providing creators with an extra cash stream.

Company overview

5. Uploan

Lendable has provided a secured loan to Philippines-based Uploan, which gives payroll-related financial services.

They will support Uploan’s “fast-growing” demand with US$6 million in immediate use, a press release stated.

The Philippine subsidiary of Lendable is Uploan. It will redirect Lendable’s capital to Uploan, and it will hold more exposure on the balance sheet through.

In addition to respect with new regulations implemented in 2020, the security of the transaction lays the foundation for increasing the Fintech company’s institutional debt.

Uploan was founded in 2017 to improve the financial well-being of working Filipinos by providing loans, salary advances, and insurance products.

The company claims to have over 100 partners in the Philippines.

During the pandemic, Uploan admitted that the company had certain challenges. For example, two debt repayment moratoriums blocked Uploan’s revenue for an extended as the country imposed a lockdown, and its GDP fell by 10%.

Despite this, the company claims to have grown its customer to over 300,000 employees while avoiding a rise in non-performing loans.

There is unprecedented financial distress between Filipinos. Many of them do not have enough money to meet despite having employment. We have signed a loan with Lendable that will give us better to meet the needs of our growing employee base. Uploan will help millions of Filipinos get out of financial distress through cooperation with progressive employers in the years to come,” said Liam Grealish, CEO of Uploan.

We are thrilled to put this into operation with Uploan and enter new Southeast Asian markets. During covid, the team had to traverse a tough operational and macroeconomic climate in the Philippines. Uploan has evolved and as a stronger firm due to diligence,” said Aaron Collett, Head of Asia Origination at Lendable.

“When the broader financial sector is pulling back, the company is ready to go even faster, providing a high chance to provide funding when people face harsh difficulties and need financial access the most.” “In challenging circumstances, Uploan’s conservative business model, digitization of processes, and team skills have allowed them to underwrite risk successfully,” he added.

Company overview

6. PayMongo

Payment platform PayMongo, based in Manila, has raised $12 million from Stripe as part of its Series A round.

The first Filipino-owned startup to participate in Y Combinator’s accelerator program was PayMongo, which provides an online payments API to businesses in the Philippines. The series A funding round also included Backrock Capital, a new investor, and former investors Y Combinator and Global Founders Capital.

APIs that allow websites and apps to accept credit card payments and digital wallets, for example, GrabPay and GCash, can be integrated. 

PayMongo partners with financial institutions, and its products include payment APIs integrated into websites and apps. In addition, the startup offers PayMongo Links, which buyers click on to send money, for social commerce sellers and other people who sell mainly through messaging apps. PayMongo’s platform also offers fraud detection and risk management tools.

Stripe’s APAC business lead Noah Pepper said that the company invested in PayMongo because it was “impressed with the PayMongo team and how they’ve made digital payments more accessible to so many businesses across the Philippines.”

According to the founders, the firm began in June 2019 with $2.7 million in seed capital, one of the highest seed rounds ever raised by a Philippines-based fintech startup. PayMongo has already raised nearly $15 million in total funding.

PayMongo has processed about $20 million in payments since its introduction, according to co-founder and CEO Francis Plaza, and has grown at an average of 60% each year since the start of the year, with a spike after the March lockdowns.

Growing demand for COVID-19-related services prompted the company to start raising its Series A earlier than planned to hire its product, design, engineering, and operations teams and speed up the release of new features. As a result, additional payment options will be available online, invoicing and marketplace features will support subscription-based business models.

PaymentMongo also plans to expand its partnership network, improve the fraud detection and risk management systems, and secure more licenses from the central bank to start developing other kinds of financial products.

Several Southeast Asian fintech companies see accelerated growth as businesses digitize more of their operations due to the COVID-19 pandemic. For example, in the Philippines, digital transactions increased by 42 percent from January to April because of the lockdowns.

PayMongo is currently the only payments firm in the Philippines with a fully online onboarding procedure, appealing to merchants new to accepting online payments. “We have a more efficient examination of compliance criteria for expedited application acceptance so that our merchants can use our platform straight away,” Plaza stated.

If the momentum continues, even when lockdowns in various locations are removed, the Philippine central bank will meet its goal of expanding e-payment transactions to 20% of total transactions this year.

In 2015, the government enacted policies designed to boost economic growth and financial inclusion because mobile phone penetration is high in the Philippines. Still, many people lack a traditional bank account, which often charges high fees.

Although the Philippines’ lockup limitations have been lifted, Plaza said PayMongo is still gaining popularity. “Despite the more liberal quarantine levels, we expect the digital transition by Filipino firms will continue, partly because both merchants and customers continue to exercise safety measures for example, staying at home and selecting online purchasing.” As a result, the new normal for commerce will be online.

Company overview

7. Voyager Innovations

Voyager Innovations owns PayMaya, a popular financial services and payment application in the Philippines. The company has secured a new $167 million funding round to launch more financial services, including a digital bank.

They raised new funding of $121 million and committed funding of $46 million. 

The International Finance Group (IFC) and the IFC Emerging Asia Fund have committed to invest up to $120 million in Voyager in April 2020.

PLDT, one of the country’s largest telecommunications companies, Tencent and KKR, and new investors, including IFC managed by IFC AMC, Financial Institutions Growth Fund, another investor in Voyager, contributed the latest capital.

As of today, Voyager has raised $452 million since 2018.

One of the most popular financial apps in the Philippines, PayMaya is also one of the leading competitors to GCash and Coins. PayMaya Mall connects consumers with 350 online merchants through an e-commerce feature known as PayMaya. Its services include bill payments, online remittances, prepaid cards, and online remittances.

Voyager announced today it has applied for a digital bank license from the Philippine central bank, Bangko Sentral ng Pilipinas (BSP). Voyager’s representative said the neobank would launch approximately six months after the Voyager acquires its license.

It may also make payments at convenience stores, where PayMaya has more than 250,000 points of customer access to digital-finance offerings. As a result, PayMaya is seven times as accessible as traditional banks in the Philippines, especially for remoting or rural areas, according to Voyager.

According to the BSP, as of 2019, 71% of Filipinos were not banked. The BSP has identified financial inclusion targets that it wants to meet by 2023, including enrolling 70% of Filipino adults in payment or transaction accounts and converting 50% of all retail payments to electronic funds transfers.

As of June 2021, the number of PayMaya and Smart Padala users registered to its remittance services had doubled to 38 million. Voyager has also expanded its services with PayMaya to provide micro- to mid-sized businesses with working capital loans and health policies for consumers and companies through PayMaya Protect.

Company overview

8. PDAX

Known by its acronym PDAX, the Philippine Digital Asset Exchange is a cryptocurrency exchange operating in the Philippines since 2017. The BSP has approved it for operation as a virtual currency exchange.

In the Philippines, PDAX offers digital assets like bitcoins, Ethereum, and other cryptocurrencies at highly competitive rates using the Philippine Peso (PHP).

PDAX continues to push boundaries to promote the adoption of cryptocurrencies and other digital assets in the country to provide an accessible and secure investment platform that is accessible to everyone regardless of their social, economic, and financial background.

Company overview

9. Coins.ph

With Coins.ph, you’ll get the best mix of convenience and functionality. For example, it can make payments to an NFC-enabled phone with beep integration. In addition, this is the only payment provider that supports cryptocurrencies.

An ownership dispute at the center of the Philippines expansion of ride-hailing startup Go-Jek slowed the Indonesian company’s growth. Still, it hasn’t deterred it from investing in the country.

Earlier this morning, Go-Jek announced an investment in Coins.ph, giving it a majority stake in the company. Go-Jek paid $72 million, according to two industry sources. With this price tag, it would be the biggest acquisition Go-Jek has made to date, although most of its previous deals have been confidential.

Five million Filipinos use their mobile wallets to make payments, top up their phones, pay their bills, and ride public transport. With the deal in place, the company will be able to tap into Go-Jek’s expertise and resources.

According to Ron Hose, co-founder and CEO of Coins.ph, the Go-Jek opportunity came as Coins.ph raised new funds.

During a phone interview, Serra revealed that they had to decide how to grow their business and thought they could ultimately work with Go-Jek to develop something bigger and better for their customers.

Coins.ph has expanded to include financial services, mobile payments and crypto exchange services in recent years. Its investment partners include Naspers, Global Brain, Wavemaker, Beenext, and Pantera Capital.

Go-Jek, estimated to be worth around $9 billion, is a strategic move in this acquisition.

Last year, it began expanding outside Indonesia – where it claims to be the largest player. Vietnam, Thailand and Singapore are between its overseas expansions, with the Philippines also being proposed, although the launch has been delayed.

Although ride-hailing companies may not consider fintech one of their main entry points, ride-hailing and fintech are interconnected in Southeast Asia. In Indonesia, Go-Jek’s growth was boosted by the success of its GoPay service, which gives online and offline payments, insurance, and even microloans. Payment services are used in half of the transactions on the company’s Indonesian network.

Grab, Go-Jek’s arch-rival, also plans to launch Grab Pay in Southeast Asia and expand into loans, remittances, and insurance with partners for example, Chinese insurer ZhongAn.

In encouraging a cashless society, Go-Jek announced Coins.ph would join forces with GoPay to provide more financial access to Filipinos.

Currently, Coins.th is functioning as normal, Hose said. Although Go-Jek has expanded in Thailand, its Thai entity has fewer locations than Go-Jek’s Philippines business. As a result of the GoPay partnership, Coin.ph’s user base in the Philippines may grow to more than 105 million, with plans to offer financial services for example, insurance, loans, and credit cards.

We are honored to participate in the Philippines’ digital payments transformation by partnering with Coins.ph, the Philippines’ second-largest economy, and second-largest population.

With today’s announcement, we continue our long-term commitment to the Philippines and use technology to make everyday lives better and positively impact society,” he added.

“But we’re not the only ones in this game.”

Alibaba invested in payment and fintech startup Mynt since Alibaba is launching GrabPay, and Tencent, China’s other Internet giant and a Go-Jek investor, invested $215 million in rival Voyager. Go-Jek is entering the fray with its own $2 billion funding round. The Philippines is set to have an exciting fintech year.

Go-Jek’s past acquisitions include offline payment firm Kartuku, the payment gateway Midtrans, and the lending and payment network Mapan – all announced at once. In addition, acquiring startups C42, CodeIgnition, and Piant in India has helped build IT hubs in Bangalore.

Company overview

10. Mosaic Solutions

MUSIC SOLUTIONS announced today that it had raised US$1 million in a pre-Series A preferred equity offering for its cloud-based management software for F&B and hospitality businesses.

Gentree, a Philippine family-sponsored venture capital fund, provided fresh funding to support new digital-economy startups in Southeast Asia. As part of its regional expansion across Southeast Asia, Mosaic said it would use the additional funds.

Mosaic initially launched a cloud-based profit optimization company in 2016, focusing on the Philippines, serving the food and beverage, retail, and hospitality industries in the Philippines, Singapore, and Vietnam. Cloud-based products from the company include data analytics, inventory management, POS, and purchasing.

In addition to multi-unit restaurants and bar groups, hotels, supermarkets, and convenience stores serving customers through its subscription-based platform, Mosaic said it is helping companies to improve margins by digitizing their daily operations.

Brett Doyle, Founder & CEO of Mosaic, said that the global pandemic had been a catalyst for the Philippines and other ASEAN countries to go digital. “However, there is still quite a bit to be done before our sector becomes digitized and more efficient,” he added.

Company overview

edited and proofread by nikita sharma