Local fintech PayMongo secures fresh capital from US investors

MANILA, Philippines — Fintech startup PayMongo Philippines Inc. has secured $12 million in additional capital from American investors to expand its business and financial product offerings to clients.

In a statement on Monday, the local payment provider, which turned a year into operation last June, said a big chunk of new financing came from US-based fintech startup Stripe, while the rest were injected by other American investors namely Y Combinator, Global Founders Capital and Bedrock Capital.

Fresh funds were raised through a "Series A" financing round or when investors pour more money into a startup with strong growth potential. The latest cash infusion brings PayMongo's total funding to $14.7 million after an initial $2.7 million seed money raised in September last year. 

"PayMongo would also be using the fresh capital to support more online payment options, have faster payout cycles, build more partnerships with other financial service providers and have a much-improved fraud and risk systems," Francis Plaza, company chief executive and co-founder, said in an e-mailed response to questions.

"We also aim to secure additional licenses from the BSP (Bangko Sentral ng Pilipinas) that will enable us to venture into offering other financial products," Plaza added.

As a local payments provider that links businesses to consumers, PayMongo is among companies that have enjoyed dramatic growth in the 6 months that the coronavirus pandemic has usher in a massive shift to digital transactions. In April alone, at the height of stringent lockdowns, PayMongo said transactions volume through its platform soared 15 times from January.

Among the company's top clients so far are telemedicine apps, digital start-ups and fast-food restaurants. 

"We believe that even post-pandemic, Filipino businesses will continue to shift online as  both merchants and customers continue to practice safety measures such as staying at home and choosing online shopping," Plaza said.

"It’s safe to say that online will be the new normal for commerce," he added.