Tonik raises $21 million to launch digital bank in the Philippines – ClearTipsNews

A wave of digital banks, or neo-banks, has flourished in recent years in Western countries as people begin to flee from mega banks.

While most of these startups have yet to prove that they can make a profit, entrepreneurs are starting to replicate similar ideas in South Asian markets, where most people have no traditional bank accounts at all. . And for now, venture capitalists are supporting this attempt.

Tonik Financial, a two-year startup in the Philippines, said on Monday that it had raised $ 21 million in a new round of financing to launch its digital bank for the Southeast Asian market by September this year.

Sequoia Capital India and Point72 Ventures have led Tonik’s Series A, while existing investors Insignia and Credence have participated, said the startup, which has raised $ 27 million to date.

Tonik, who recently received the license to operate a digital bank in the Philippines, has announced that it will commercially launch digital banking in the third quarter of this year.

Greg Krasnov, Founder and CEO of Tonik, estimated that the retail savings market in the Philippines was worth $ 140 billion and that the Southeast Asian country also presented a $ 100 billion opportunity in unsecured consumer loans. ClearTipsNews could not independently corroborate these market estimates.

Krasnov, who has already incubated four financial services startups in Asia, said the coronavirus pandemic has prompted people to double their savings and has shown that the vast majority of the Philippines need access to a digital bank.

“In the Philippines, where more than 70% of the population remains unbanked, we have seen a rapid increase in consumer demand for digital banking and digital transfers since the start of the year,” he said. .

“We are about to bring a very differentiated experience to the Filipino consumer to meet these needs and we are honored to be supported in this regard by regulators who have encouraged innovation and welcomed technological solutions to strengthen financial inclusion “, he added.

In several markets in South Asia, where, as in the Philippines, a large part of the population remains unbanked, startups are rushing to fill the void. But it’s interesting to note that most of them are for startups and other small and medium-sized businesses – not individuals.

In India, for example, NiYo Solutions, based in Bangalore, and Open are two of the highly supported startups that have raised more than a million businesses on their platforms.

RazorPay, another Bangalore-based startup, launched last year a range of features such as corporate credit cards, and a unique dashboard to help businesses manage transactions and empower them to ” automate recurring payments. Some of these features are not currently offered by a traditional bank.