Chinese Tech Giants Pouring Money Into Philippine FinTech Startups

Chinese tech giants are pouring money into the Philippines to take on PLDT. A recent article cites Mynt’s plan to double its valuation to $2 billion through future funding. The company has received about $300 million in funding to date. In addition, it has acquired stakes in Rocket Internet and GLoan.

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Mynt plans to double its valuation to $2 billion through future funding

Philippine fintech startup Mynt plans to double its valuation to over $2 billion through future funding. The company, which is backed by Ant Group, is a digital financial services provider that provides micro-payments and mobile loans. The company raised a $175 million funding round in January and has since added over 11 million users. The company aims to use the funding to expand its financial-services offerings and double down on lending.

Mynt’s CEO, Martha Sazon, says the new funding will allow it to pursue its mission of providing affordable finance to everyone. This vision aligns with the country’s wider push for financial inclusion. The company aims to double its valuation by 2022.

PLDT sells stakes in Rocket Internet

The Filipino Telecom 175m Techasia giant PLDT is selling its stake in Rocket Internet. In August 2014, the firm invested EUR333 million to buy a 10% stake. However, the company declined to participate in later fundraising rounds, and its stake has now fallen to 6.1%. While PLDT is selling its stake in Rocket, it’s not saying that it’s giving up on the technology startup.

The firm has sold part of its stake in Rocket for $50 million. The sale is intended to fund the company’s capital expenditures for the 2020 fiscal year. The firm has committed to sell 6.8 million Rocket shares back to the German company. Nevertheless, the price is still high compared to previous offers.

PLDT’s stake in the startup was a part of a global strategic partnership with Rocket Internet. The two companies aimed to develop consumer internet businesses outside China and the U.S. Rocket’s prominent brands include Zalora, Lazada, and Dafiti, which have rapidly expanded in their markets. The company is currently investing in more than 100 countries worldwide, including the U.S. and the Philippines.

The company should have fared better with its latest investment from Tencent. With this investment, PLDT should be able to focus on its core business and increase profitability. Meanwhile, its record capex investment should help increase its core Filipino Telecom 175m Techasia business. While PLDT remains the country’s largest telecom operator, it hasn’t been reaping the benefits of its position. Moreover, it faces imminent competition from a third telecom provider.

PLDT’s net debt is at a relatively lower level than at the end of last year. Its net debt stood at P2.4 billion as of June 2018, compared with P1.9 billion at the end of 2016. The company’s debt to EBITDA ratio is only 1.89x, making PLDT’s debt position more manageable for the short term. Furthermore, PLDT has reduced its workforce to improve efficiency and minimize costs.

PLDT Online also subscribed to a US$1.5 million convertible note issued by iflix. This loan is a zero coupon, senior, and unsubordinate convertible note. Its value is convertible into Series B Preferred Shares and will be used for local content strategy and regional expansion.

Rocket Internet’s goal is to build a global internet empire. The company plans to replicate the success of Alibaba and Amazon in markets outside the United States. The company also hopes to adopt new technologies to reach out to new consumers. And while Rocket Internet may be struggling to compete with Amazon, it has managed to stay ahead of its competition and improve on its technology and innovation.

Chinese tech giants are pouring money into the Philippines to compete with PLDT

Chinese tech giants are pouring money into FinTech startups in the Philippines, and PLDT isn’t the only company taking notice. China’s Tencent Holdings is investing $175 million in PLDT’s financial technology unit. Tencent is a Chinese internet giant that competes with Alibaba Group Holdings. Last year, Ant Financial Services Group, a unit of Alibaba, invested 45% in Globe Telecom’s fintech arm.

PLDT, one of the two major wireless carriers in the country, has said it is looking for strategic partners to expand its digital applications division. PLDT chairman Manuel Pangilinan said he is open to partnering with Chinese companies to expand its digital offerings.

Duterte’s election campaign targeted oligarchs in the Filipino Telecom 175m Techasia industry, and his administration has pledged to take on the PLDT duopoly. Duterte highlighted the painfully slow internet speeds that the Philippines had experienced, and warned that he would introduce a third telecom operator to increase competition. Since the election, internet speeds in the Philippines have improved dramatically, more than doubling. Duterte recently awarded the third license to Dito, which is expected to launch in the coming months.

Duterte’s war against Globe seems to be working. Before Duterte took office, about 25 percent of Edukasyon’s web traffic was coming from its Free Basics program, which allows Filipinos to use some websites for free. This program was the only way for lower-income students to access the internet.

But China’s technology campaign has a potential downside. The flood of government funds can skew investment decisions. It can distort the market and lead to unsustainable growth. Nevertheless, the government’s monetary aids and subsidies help Chinese companies build their technology bases and expand their operations.

Among the recent scandals involving Chinese tech giants include a $2.8 billion fine for Alibaba in an anti-monopoly investigation. The Chinese government has also dramatically cut the amount of time children under 18 can play online games. And just days after Didi’s IPO, the government launched a cybersecurity probe into the company. But, Chinese tech giants aren’t giving up — instead, they are putting their money to social causes. Earlier this year, Tencent said it would double the amount of money it spends on social initiatives. It will use the money to help rural areas and help low-income groups grow their earnings.

Chinese Filipino Telecom 175m Techasia are leveraging their huge numbers to compete with PLDT. Google and Facebook have billions of users, and Facebook alone is one of the top four social networking services in the world. Google has half a dozen services with 1 billion or more users. These two companies provide diversity and abundance of data.