Philippines digital bank Tonik raises $131m

Point72 Ventures, iGlobe Partners, Alpha JWC Ventures, Insignia Venture Partners, Sixteenth Street Capital, Citius, Blauwpark Partners, and Nuri Group also participated. It follows a USD 17m pre-Series B led by iGlobe last year and a USD 21m Series A led by Sequoia India and Point72 in 2020.

Tonik was founded in 2018, received the first private digital bank license in the Philippines in 2019, became a Mastercard issuer in 2020, and launched in March 2021. The start-up is supervised by the central bank of the Philippines, and deposits are insured by the government-run Philippine Deposit Insurance Corporation. It brands itself as the first digital-only bank in Southeast Asia.

Offering interest rates of up to 6%, Tonik secured about PHP1 billion ($20 million) in retail deposits within a month of launch, said to be a record for any new bank in the Philippines. Essentially, the idea is to open accounts for the upper part of the middle class and lend the money to the lower part of the middle class, which requires unconventional credit assessments.

“We’re going after the 80% of the population that has never had a bank loan and cannot get a bank loan,” Tonik’s founder and CEO Greg Krasnov (pictured), told AVCJ last year. “It’s about sifting through that and seeing who is more or less disciplined. For the ones that are more disciplined, you want to keep doing business with them.”

Tonik maintains headquarters in Singapore, but much of its offering is about catering to the needs of the Filipino market in terms of access and flexibility. For example, a savings account product called Group Stash facilitates shared saving based on the “paluwagon,” a locally practiced system of informal group finance.

The company estimates the Philippines represents a USD 140bn retail savings market and a USD 100bn unsecured consumer lending opportunity. It plans to leverage its partnership with Mizuho – one of Asia’s 10 largest banks in terms of assets – to access international wholesale funding markets and managerial talent as part of a regional expansion.

“Tonik's unique track record so far validates the existence of massive demand for digital banking services in the Philippines, where over 70% of the population remains unbanked,” Daisuke Horiuchi, a managing executive officer at Mizuho, said in a statement. “As the first mover and market leader, Tonik is well-positioned to grow into one of the largest banks in the Philippines, as well as enter other Southeast Asian markets.”

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• Topics
• Southeast Asia
• Financials
• Technology
• Early-stage
• Philippines
• Sequoia Capital
• Prosus Ventures
• iGlobe Partners
• Alpha JWC Ventures
• Insignia Venture Partners
• Financial Services
• Fintech