Tonik Financial, the first pure-play digital bank in Southeast Asia based in Singapore, has closed its Series A equity funding round, with $21 million in total commitments, that will finance the launch of its digital bank in the Philippines.
In a statement Monday, Tonik said the funding round was co-led by Sequoia India and Point72 Ventures and was also participated by Insignia Ventures Partners and Credence Partners, both of which chipped in a combined $6 million in the firm’s equity funding round in February.
Early this year, 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 consumers 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.
The close of the Series A funding comes as the COVID-19 pandemic, which the Philippine government struggles to contain, has prompted consumers to opt for online banking transactions as opposed to visiting banks.
“COVID-19 is causing consumers all over the globe to save more for emergencies, to care more about the safety of their money as well as about earning a fair interest rate on their deposits while having access to their funds for easy withdrawal and transfer,” Krasnov said.
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.
The firm has also observed a rapid jump in consumer demand for digital banking and digital transfers in the country since the start of the year
“We are preparing to bring a highly differentiated experience to the Filipino consumer to address these needs and are honored to be supported in this by the regulators who have encouraged innovation and welcomed technology solutions to bolster financial inclusion,” Krasnov added.
Krasnov, who is also the company’s CEO, said that over 70 per cent of the adult population in the Philippines remains unbanked 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 believe deeply in Tonik’s vision for a digital bank that is underpinned by the customer protections inherent in being a government-approved bank, and also the flexibility of being a completely digital start-up,” said Pete Casella, head of fintech investments at Point72 Ventures, the co-lead investor in the Series A funding round.