GCash IPO could leapfrog Philippine startups’ growth
By Beatriz Marie D. Cruz, Reporter
THE much-awaited initial public offering (IPO) of digital wallet provider GCash could lay the groundwork for investment opportunities for Philippine startups, according to analysts.
“We need to be able to encourage founders and investors that there is an exit potential, that their investment of their time or capital in that startup can lead to an outcome that’s great for everyone,” Paulo Campos III, founding managing general partner at Kaya Founders, told BusinessWorld on the sidelines of Sinigang Valley’s BUILD Startup Festival.
The electronic wallet platform is one of the most highly anticipated IPOs this year, with the company targeting an $8-billion (P454.4 billion) valuation once it goes public.
Its parent company, Globe Fintech Innovations, Inc. (Mynt), is the first and only company to reach “double-unicorn status” after raising $300 million in a funding round in 2021, lifting its valuation to more than $2 billion.
Rene Cuartero, founder and chief executive officer (CEO) at venture capital firm AHG Lab, said the GCash IPO could be a “game-changer” for the country’s expanding startup ecosystem.
“The IPO will show proof of a pathway for a lot of our startups in the Philippines towards listing in the market,” he said on the sidelines of the event. “It will also be an excellent test case on what regulations might need to be adjusted in order to accommodate large and smaller tech companies that want to [list].”
It takes about 10 years for a startup to be ready for an IPO. If successful, this would allow startups to access a larger pool of investors and expand further, making it a more established entity in the market.
Since its launch in 2004, GCash has had more than 94 million registered users. Its popularity grew as more people adopted digital payments during the coronavirus pandemic.
Its services are available in 16 markets including the US, UK, United Arab Emirates, Australia, Canada, Germany, Hong Kong, Italy, Japan, Saudi Arabia, Kuwait, Qatar, Singapore, South Korea, Spain and Taiwan.
The GCash IPO would also increase the Philippines’ attractiveness to investors as an emerging tech hub, said Oscar Enrico A. Reyes, Jr., president and CEO at G-Xchange, Inc., the company that operates GCash.
“It’s very important that it becomes a successful IPO,” he told BusinessWorld. “And if that happens, the whole investment community starts seeing the Philippines as a potential tech hub.”
“This is something that’s homegrown, and if we can be one of the biggest and most successful kind of startup that is publicly [listed,] then hopefully it encourages more investors to look for other opportunities here in the Philippines,” he added.
