Philippines Payment Startup PayMongo Raised $12 Million in Series-A
Manila-based online payment platform, PayMongo announced today, September 28, 2020, that it has raised a $12 Million in Series-A round, which was led by its existing investor and a US-based fintech company, Stripe. The other investors including Y Combinator and Global Founders Capital also took part in the fundraising for the startup’s Series-A besides the new participation from investors such as BedRock Capital. The company, which offers an online payments application programming interface (API) for businesses in the Philippines, was the first Filipino-owned financial tech startup that took part in Y Combinator’s accelerator program.
Co-founder and chief executive of PayMongo, Francis Plaza explained the startup originally planned to go its Series-A fundraising in the first half of 2021 but the demand for payment service platform had rapidly surged due to the COVID-19 pandemic. With this funding, the company aims to hire more teams including engineers, and expand its service by introducing new features such as different online payment options; features for invoicing and marketplaces; support for business models like subscriptions; and faster payout cycles.
PayMongo’s Series-A Fundraising
As founders of the company claimed, PayMongo witnessed one of the largest seed rounds ever raised by a Philippines-based fintech startup when it launched its operations in June 2019 with $2.7 million in seed funding. In total, the company has now raised almost $15 million in funding that would allow the startup to expand its existing financial payment operations. PayMongo offers payment service by making partners with financial institutions and linking payments API into websites and apps, allowing them to accept payments from bank cards and digital wallets such as GrabPay and GCash.
Following the announcement, Stripe’s APAC business lead Noah Pepper said in a statement that it invested in PayMongo because “we’ve been impressed with the PayMongo team and the speed at which they’ve made digital payments more accessible to so many businesses across the Philippines.”
Plaza said in a statement that the startup is currently the only payment company in the Philippines with an onboarding process, which was made completely online, which drew the attention of merchants to the company. He added, “We have a more efficient review of compliance requirements for the expeditious approval of applications so that our merchants can use our platform right away and we make sure we have a fast payout to our merchants.”
Pandemic Helps PayMongo
PayMongo is one of the fintech companies in Southeast Asia that has made its fortune of growth during the pandemic as many businesses demanded more digitalize payment platforms. Plaza said that overall digital transactions in the Philippines grew 42% between January and April because of the country’s lockdowns. He added that PayMongo has processed a total of almost $20 million in payments since launching, and grown at an average of 60% since the start of the year, with a surge after lockdowns began in March.
Plaza shares a view that the payment platform would grow substantially due to the increasing demand for digital financial transaction services as well as the government policies for the expansion of e-transaction platforms, even in the post-lockdown scenario.
According to TechCrunch, the government began setting policies in 2015 to encourage more online payments, in a bid to bolster economic growth and financial inclusion, since smartphone penetration in the Philippines is high, but many people don’t have a traditional bank account, which often charges high fees. The government has a target of increasing the volume of e-payment transactions to 20% of total transactions in the country this year.