Global venture capital firms Accion Venture Lab and DeepBlue VC have led an investment round in Philippines-based online lending startup First Circle, taking the fintech company’s total seed funding to $2.5 million.
The startup first raised a seed round of $1.2 million in last October led by Dublin-and-London-based investor Key Capital.
Founded in 2015, First Circle provides short-term working capital to small and medium-sized enterprises (SMEs) in the Philippines, a sector that comprises 99 per cent of the businesses in the country. Most companies it supports do business online, and others are into export.
First Circle CEO Patrick Lynch said that they plan to use the latest funds to further develop First Circle’s technology and data analytics platform. This includes proprietary software and credit scoring to increase access to financial services for the underserved in the Philippines, and later expand access to credit in Southeast Asia.
In an interaction with DEALSTREETASIA, Lynch said that they expect to be lending in tens and millions of dollars to SMEs this year and probably raise a Series A round before 2017 ends.
“We basically raised these latest funds because Accion is the best investor in our space and we went into the process,” he said, noting First Circle will invest to improve its service locally before it considers reaching out to SMEs in other parts of Southeast Asia.
Accion Venture Lab managing director Vikas Raj said that with First Circle as a partner, they can advance access to capital for small businesses in the Philippines and beyond.
As part of global nonprofit group Accion, the Accion Venture Lab has deployed over $10 million across more than 25 startups in over 20 countries worldwide since its launch in 2012.
Lynch said that the SME market segment in the Philippines is so big that it will take some time before the company can reach a penetration rate.