Singapore digibank Tonik raises $21m to launch in the Philippines this year

Singapore-based digibank Tonik said it has raised US$21 million in series A funding to bankroll the launch of its digital bank in the Philippines. It aims to start commercial operations in the country in the third quarter of 2020.

Tonik founder and CEO Greg Krasnov / Photo credit: Tonik

The round was led by Sequoia India and Point72 Ventures and included “significant” participation from previous backers Insignia Ventures Partners and Credence Partners, according to a statement. Insignia and Credence poured US$6 million into Tonik in February.

Founded in 2018, the digital bank provides deposit, loan, payment, and card products. It was recently granted its own bank license by the central bank of the Philippines (BSP) earlier this year to offer its services in the country, where it’s targeting a young and tech-savvy population.

“In the Philippines, where over 70% of the population remains unbanked, we are observing a rapid jump in consumer demand for digital banking and digital transfers since the start of the year,” Tonik CEO and founder Greg Krasnov said in a statement.

The startup estimates that the Philippines represents a US$140 billion retail savings market and a US$100 billion unsecured consumer lending opportunity. Krasnov told Tech in Asia that over the next five years, Tonik aims to have a user base somewhere in the millions.

“Our market entry will include a combination of organic marketing and partnerships,” he said, noting that the core of its strategy lies on the company’s unique product and its ability to reduce the major pain points presented by current competing solutions.

Some players already offering digibank services in the Philippines include Netherlands-based ING Bank, Malaysia’s CIMB Bank, and local player UnionBank.

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Krasnov said the company initially planned to launch the digital bank this month, but moved it to around September and October in light of the Covid-19 pandemic.

“Managing a workforce spread across eight countries has also been a unique challenge. However, we have adapted well […] so we are confident of being able to achieve our revised launch timeline and bring our solution to market by the end of the year,” the CEO said.