The Philippines’ first neobank Tonik announced on Tuesday that it has raised USD 17 million in its pre-Series B funding round led by iGlobe Partners, as well as existing shareholders Sequoia India, Altara Ventures, and Insignia Venture Partners. The round had participation from global VC firm Citius, Russia’s largest private equity firm Baring Vostok Capital Partners, and multiple Philippine family offices. The latest investment brings Tonik’s total funding to USD 44 million.
“The new funding will help us accelerate our growth, as well as invest aggressively in product development. In the course of the next 12 months, we plan to significantly broaden our stack of first-in-the-market digital financial products for our clients, especially strengthening our offer on payments and rolling out consumer loans,” said Greg Krasnov, Tonik CEO and founder.
The news comes shortly after the neobank found popularity after its public launch in March. “We have seen tremendous traction since the launch. We have onboarded 30,000 clients and achieved a positive balance sheet of over USD 20 million within a month. In the meantime, we have done little marketing,” Krasnov told KrASIA in a previous interview.
This recognition mirrors the potential in the Philippines’ digital banking sector, in which 71% of the country’s 72 million adult population remain unbanked, according to the 2019 Financial Inclusion Survey. The unbanked masses, however, are represented by young people who are comfortable using smartphones for multiple functions. They have a median age of 24 and are underserved by the current banking system.
Tonik is a local subsidiary of Singapore-based fintech firm Tonik Financial; 40% of the local subsidiary is owned by Philippine investors, including conglomerate Camerton Holding and Oak Drive Ventures, a management firm that serves as a vehicle for business ventures. The firm operates with a rural banking license while it awaits regulatory approval for a digital banking license from the Philippine central bank, Bangko Sentral ng Pilipinas (BSP).
According to a report by local publication Manila Bulletin, Tonik is expected to be the second financial institution in the Philippines to receive a digital banking license by the BSP, yet the report did not specify a specific timeframe. Overseas Filipino Bank (OF Bank), a subsidiary of the state-owned Land Bank of the Philippines, was the first digital bank to obtain such a license.