YC-backed startup wants to do Stripe for Southeast Asia

For only the second time, a startup from the Philippines has been accepted into Silicon Valley’s Y Combinator, the prestigious incubator that has nurtured more than 2,000 fledgling tech businesses.

With Paymongo, Philippine-born Francis Plaza has created a service that helps online merchants get paid.

“We applied to get into YC late March – actually, like a day before the deadline. We were three days into the idea, so we’d just written a few lines of code at the time,” Plaza tells Tech in Asia. “We were surprised.”

Francis Plaza / Photo credit: Paymongo

The first Philippine startup admitted into YC was jobseekers app Kalibrr back in 2013.

Black hole

Plaza, 26, likens Paymongo to Stripe, which began in San Francisco in 2010 and has evolved into a US$23 billion business.

Paymongo is adapted to the quirks and characteristics of the Philippine ecommerce market, where a lot of selling happens informally over Facebook or Instagram, few people use credit cards, and the majority of online shoppers pay in cash.

Stripe has yet to launch in the Philippines. So far, its Asian progress is limited to Singapore, Hong Kong, Malaysia, and Japan, with India being added soon.

Plaza recently ran into a Stripe executive in Silicon Valley and got the impression that the Philippines is “kind of a black hole for them,” says the CEO.

The entrepreneur believes there’s enough space for his business to prosper in the Philippines first before expanding across Southeast Asia, noting that “payments is inherently a jurisdictional thing.”

He explains,”For every country where you expand to, you have to do partnerships with financial institutions again, do compliance, and all that.”

Plaza is keen to adapt to each Southeast Asian nation as Paymongo expands, although it will surely be a large undertaking, as it requires a significant capital raise to build country-specific teams and services. While the next destination hasn’t been decided, he’s eyeing July to September 2020 for his first move outside of the Philippines. Vietnam is an “attractive” contender, but the “saturated” Indonesian market is an unlikely first target, the CEO explains.

The four founders at Y Combinator’s campus / Photo credit: Paymongo

Different stripes

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