Advance, a Manila-based fintech startup that operates a salary-on-demand platform, has raised an undisclosed amount in its seed funding round backed by Southeast Asia-focused venture investor Wavemaker Partners.
The funding round, which was led by US-based Next Billion Ventures and joined by Dymon Asia Ventures and Accion Venture Lab, further boosts the startup’s 24/7 salary-on-demand platform, which allows employees to access their salary anytime without having to wait for payday.
Currently, most Filipino workers live paycheck to paycheck, forcing them to borrow cash for their daily needs. As bank loans are not very accessible, especially to wage earners, workers opt to borrow from predatory lenders who can charge interest rates of up to 20 per cent.
“We’ve heard so many horror stories of people with an urgent need for cash who resort to payday lenders due to the lack of quality options. We knew that we could provide a much safer alternative to keep them from succumbing to these endless debt cycles,” said Advance co-founder and CFO Addi Guevara.
The platform, which will partner with companies, seeks to address that trend, which is a profound problem not only in the Philippines but also in other emerging markets.
Advance co-founder and CEO Jaime de los Angeles said the platform does not offer a loan but acts as a financial bridge between employers and employees.
“Filipinos deserve to get access to the salary they’ve worked hard for whenever they need in order to regain a greater sense of control in their everyday lives,” he added.
For employers, the platform allows them to grant financial assistance to workers without having to tap into company resources, Advance said. Over the past twelve months, the startup said its platform has provided close to $3 million to thousands of Filipinos across the country.
De los Angeles said the fresh funding will be used to improve further on technology, bolster operations, and expand business in terms of new products and markets. It aims to service 1 million employees and 10,000 businesses in the next five years.
Commenting on the funding round, Ken Toyoda of Next Billion Ventures said the startup will “positively impact millions of Filipinos.”