Investors led by buyout major KKR and China’s Tencent Holdings will pick up a substantial minority stake in Philippine tech company Voyager Innovations for a total of $175 million, Voyager’s parent company PLDT Inc announced on Thursday.
The deal marks the largest investment to date in a Philippine technology company. It is also KKR’s first private equity investment in the Philippines. The investment will be funded from KKR Asian Fund III.
Founded in 2013, Voyager Innovations offers mobile money and payments (under the PayMaya brand), mobile-based remittances (Smart Padala), digital lending (Lendr) and solutions for businesses to receive online and card payments anytime, anywhere (PayMaya Business).
Voyager competes with players such as Mynt, which last year received an undisclosed investment from Ant Financial, the financial services arm of Tencent rival Alibaba. Interestingly, Mynt is backed by Globe Telecom, a rival to Voyager parent PLDT.
Voyager’s new investors will subscribe to newly-issued shares worth up to $175 million. Telecom company PLDT will remain its majority shareholder upon completion of the transaction, which is expected within the fourth quarter of 2018.
The agreements signed separately by KKR and Tencent also contain provisions for Voyager to issue additional shares to other investors which could reduce PLDT’s ownership to less than 50 per cent while still retaining it as the largest shareholder.
Voyager investment part of strategy to invest in high-growth markets: KKR
“We are excited about Voyager Innovations and to further invest behind online payments leaders in emerging markets. Voyager Innovations provides critical digital and financial services to millions of Filipinos looking to join the digital economy for work and play,” said KKR Southeast Asia director Terence Lee.
“Having global powerhouses such as KKR and Tencent as investors in Voyager Innovations demonstrates not only their confidence in the company’s ability to execute its vision, but also their confidence in the Philippine technology industry as a whole,” said PLDT chairman, president and CEO Manuel V. Pangilinan.
The official statement noted that the proposed investment in Voyager Innovations is not subject to the compulsory merger notification regime under the Philippine Competition Act. The deal has also received the blessings of Bangko Sentral ng Pilipinas, the Philippines’ central bank.
Bank of America Merrill Lynch is acting as the financial advisor to Voyager Innovations, while Latham & Watkins and Picazo Buyco Tan Fider & Santos are acting as legal counsel to PLDT and Voyager Innovations. Paul, Weiss, Rifkind, Wharton & Garrison, and Sycip Salazar Hernandez & Gatmaitan are acting as legal counsel to KKR and Tencent.
KKR’s other technology and fintech investments include Indonesia’s ride-hailing and payments major Go-Jek, China’s personal finance management platform Suishou Technology and global payment technology and services provider First Data.