Manila: In the Philippines, where most people are still unbanked, nearly every "Juan" and "Juana" has a GCash account, allowing them to pay and get paid for almost any transaction from anywhere. That's the power of fintech.
Now, after posting 300 per cent jump in its net income to $115.7 million, GCash has increased its initial public offering (IPO) prospects after its valuation recently surged to $5 billion.
GCash is the Philippines’ largest mobile wallet and e-payments plaform reportedly gearing up for a share offer, potentially making it the country’s largest-ever IPO, as the company is valued in local currency at 289.6 billion pesos.
This significant valuation boost came from new investments by Philippine conglomerate Ayala Corp. and Japan’s MUFG Bank Ltd.
It was Globe Telecom's answer to Smart Communications' "Smart Padala" which aimed to serve the majority of Filipinos who lacked access to formal banking services at the time.
Capital infusion
Globe Telecom Inc., the parent company of GCash operator Mynt, announced that Ayala Group’s AC Ventures Holdings Inc. acquired an additional 8 per cent stake in GCash for 22.9 billion pesos ($395.4 million), raising its ownership to 13 per cent.
The deal includes a subscription to 157.62 million common shares priced at 145.372 pesos each ($2.51). MUFG also invested $393 million into Mynt, securing an 8 per cent stake.
This Japanese bank has been actively investing in digital startups across the Asia-Pacific region, including Home Credit Philippines.
While the recent fundraising activities are still being finalised, with Morgan Stanley serving as the exclusive financial advisor to Mynt, another investor is expected to join Mynt. The Zobel family conglomerate is in discussions with a party interested in acquiring a portion of its ownership stake in GCash.
The entry of a new strategic investor would enhance the company’s stock market debut prospects. In 2021, Monde Nissin Corp. raised Php48.6 billion ($839 million) from its IPO, the most successful market debut in Philippine history.
No hurry
GCash has been preparing for a public offering to scale its business, though the company has been cautious, with Globe Group president Ernest Cu stating there was “no hurry” to go public.
The investment community welcomed the equity deals, with Globe’s shares rising by 2.59 per cent to 2,218 pesos each, while Ayala’s shares fell by 0.25 per cent to 590 pesos.
The new deal made GCash the first “unicorn” in the Philippines to reach a $5 billion valuation, up from $2 billion in the last funding round in 2021.
Double unicorn
Previously, Mynt achieved “double unicorn” status with a $300-million equity investment from Warburg Pincus, Insight Partners, and Bow Wave Capital.
Before the capital infusions from Ayala and MUFG, Globe and Jack Ma’s Ant Group held 35 per cent and 34 per cent ownership stakes in GCash, respectively.
Although the exact shareholding percentages post-transaction remain confidential, Globe and Ant Group are still major shareholders. Mynt saw its net income grow three-fold to Php6.7 billion ($115.7 million) in 2023.
It has been expanding internationally to countries including the US, Canada, UK, Australia, Italy, Japan, Germany, Spain, UAE, Qatar, Hong Kong, Taiwan, and South Korea.
Top 5 IPOs in the Philippines:
- Monde Nissin Corp. (June 2021): Php55.9 billion (around $1.3 billion)
- Converge (October 2020): Php29.08 billion (around $600 million)
- Robinsons Retail Holdings, Inc. (October 2013): Php28.11 billion (around $650 million)
- SM Investments Corp. (March 2005): Approximately Php26.25 billion (around $500 million)
- Cebu Air, Inc. (October 2010): Php23.3 billion (around $539 million)
