Ayala, which owns Mynt's principal shareholder, Globe Telecom, and Mitsubishi UFJ Financial are each purchasing 8 percent at that valuation, a statement on Friday showed. Chinese payment behemoth Ant Group, formerly Ant Financial, is another major shareholder of Mynt.
Mitsubishi UFJ, via MUFG Bank, also owns a 20 percent stake in local lender Security Bank Corp.
Big picture
Mynt, which earned a profit of about P6.7 billion last year, is the country’s first unicorn, which refers to a private startup valued at $1 billion (P58 billion).
This latest deal, first reported by InsiderPH, makes Mynt/GCash the country’s fourth most valuable private financial institution after Sy-led BDO Unibank Inc. (P757 billion), the Ty family’s Metropolitan Bank & Trust Co. (P305 billion), and Ayala’s Bank of the Philippine Islands (P658 billion).
Its current value is almost three times that of Sy’s China Banking Corp., which was established over a century ago.
What went on before?
GCash, led by President and CEO Martha Sazon, became a household name during the COVID-19 lockdowns as people confined to their homes turned to mobile payments for daily transactions.
Launched two decades ago, the mobile payments company saw substantial growth after Ant Group became a strategic investor in 2017. This partnership supercharged its expansion with new resources and technology.
With over 90 million users, GCash has transformed the payments industry. It has also ventured into allied areas like loans, savings, insurance, and stock market investments.
Management has a few things to say
“We are thrilled to welcome MUFG as a new strategic partner. With their global expertise and reach within the financial inclusion space, they will be instrumental in further expanding GCash’s social impact, especially to the underserved," Sazon said.
"Alongside this, Ayala’s unmatched commitment to Philippine economic growth & development, and its expertise in multiple industries will accelerate GCash’s mission,” she added.
Cezar Consing, president and CEO of Ayala said "We like the long-term growth prospects of Mynt. It is a clear leader in a fast growing space and a key contributor to the Philippines’ economic growth. "
From MUFG
“GCash is an indispensable infrastructure for everyday life of Filipinos and we are delighted to join Mynt as a strategic investor to support the growth of the company," said Yasushi Itagaki, senior managing corporate executive, head of global commercial banking business group.
"With our investment, we are excited to expand our contribution to the ongoing development of the Philippines’ digital economy and financial inclusion," he added.
Analysts’ view
“Based on earnings, they are heading in the right direction considering the dominant market leadership position and monetization efforts which saw GCash earn almost P3 billion in the first quarter,” said Adrian Yu, head of institutional sales at stockbrokerage house COL Financial Group.
“[First quarter] earnings should be a good basis for [full-year 2024] since GCash might introduce new products which are not immediately accretive to earnings,” he added.
Globe also benefits
Globe, led by CEO Ernest Cu , owned about 35 percent of Mynt before this deal while Ayala held 5 percent.
“This is good for Globe since it alleviates any potential need for capital call,” he said.
“We are just talking about potential upside of a possible listing at this point to value Globe’s stake in GCash more appropriately,” Yu added.
What’s next?
Mynt remains a major candidate for an initial public offering (IPO), although it’s unclear how this investment will impact those plans.
Yu said it makes sense to list at a valuation of $6 billion, which would potentially be the country’s largest, assuming the IPO was done in the Philippines.
Last June, Abacus Securities’ research head Nicky Franco also pegged the IPO valuation at $5-$6 billion given surging growth for digital payments and the company’s other products.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.