Tonik Financial, the first pure-play digital bank in Southeast Asia based in Singapore, announced that it has raised $6 million in an equity funding round that will finance the launch of its digital bank in the Philippines.
In a statement, Tonik said the funding round was led by regional venture capital investors Insignia Ventures Partners and Credence Partners, with participation from regional family offices and angel investors.
Last month, Tonik Financial announced that its subsidiary – Tonik Digital Bank Inc – received approval from the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, to provide digital banking services, such as retail banking, deposits, and consumer loans, in the country.
The financial technology company, founded by Greg Krasnov, said it will be launching the digital bank in the Philippines on the basis of its own bank license, targeting the start of commercial operation in the third quarter of this year.
The launch of the digital bank comes as a positive development for the Philippines, which has largely been bypassed by a surge in digital banking in Asia in recent years.
The country represents a $140-billion retail deposit market and a $100-billion unsecured consumer lending opportunity, Tonik said.
Krasnov, who is also the company’s CEO, said that over 70 per cent of the adult population in the Philippines remains unbaked and market research indicates that over 50 per cent of existing bank clients would be keen to switch their deposits to a pure-play digital contender.
“We look forward to working with our new investors to improve financial inclusion in the country,” he added.
For Singapore-based VC Insignia Ventures Partners, Tonik is the second digital bank that it is investing in. The firm has earlier joined a Razor-led consortium that bids for a fully digital bank license in Singapore. Razer will be taking a majority stake of 60 per cent and the partners, including Insignia, will be taking the remaining equity interest in Razer Youth Bank.
“Consumers in emerging markets deserve the ease and convenience of offerings like Amazon, and they expect the same from their bank,” said Yinglan Tan, founding managing partner of Insignia Ventures.
Founded in 2018, Tonik was seeded and built by fintech venture builder Forum, also founded by Krasnov. It provides retail financial products, including deposits, loans, current accounts, payments, and cards on what the company considers as a highly secure digital banking platform.
Last month, Tonik announced that it will utilise Finastra’s Fusion Essence in the cloud to power its end-to-end banking capabilities and support the launch of its digital banking services in the Philippines.
Finastra is the third largest fintech company in the world and its Fusion Essence technology has already powered European neobanks, including riverbank and Gravity.
Finastra’s Fusion Essence Cloud will be deployed out of the Microsoft Azure Southeast Asia Region (Singapore Data Center), which is said to allow for both low latency and data residency.