For Philippines-headquartered payments processing startup PayMongo, the current focus is all about deepening its local presence.
“It’s a big enough market and people just have to really believe in it,” said Francis Plaza, co-founder at the six-month-old startup that recently raised $2.7 million in seed funding, the biggest in the history of the Philippine startup ecosystem.
“This round was beyond our initial target, which goes both ways – it is great to have a runway but it adds pressure to deliver products fast,” said Plaza, highlighting the growth prospects of the burgeoning startup ecosystem in the Philippines. “The market is ripe. It is a very small market… but it’s about fast growth. We are growing 30 per cent year on year.”
Plaza, however, declined to disclose the valuation of the startup.
“We definitely want to be the biggest payments processing platform in the Philippines and then expand into the rest of Southeast Asia, especially in markets similar to the Philippines, such as Vietnam,” he said.
PayMongo’s seed funding is significant at a time when a host of startups are hungry for venture capital support. According to the latest report jointly launched by Google, Singapore’s state investment firm Temasek, and Bain & Co, the lack of homegrown unicorns explains the lower levels of funding received by the Philippines as compared to its neighbours.
Launched in April by four co-founders – Plaza, an MIT engineer; software engineer Jamie Hing II; business entrepreneur Luis Sia; and former Philippine Cabinet official Edwin Lacierda – PayMongo facilitates payments for businesses.
Payments processing is one of the challenges that startup businesses in the Philippines face, Plaza said recalling how the seeds of the venture were sown. “We were running out of money selling our services to companies. We offered app development, website design, and others. And we realised that for most of the clients that we’ve approached, payments processing has been the hardest challenge for them. So, we thought, why don’t we solve it ourselves.”
This is even as there are already a few major players in the segment. These are prominent names such as DragonPay, Paynamics, and IP88 – all payments processing firms that PayMongo wants to challenge in a market where 77 per cent of adults still do not have bank accounts, according to a 2018 survey by the Bangko Sentral ng Pilipinas, the country’s central bank.