Local fintech startup NextPay has raised $1.6 million (about P80 million) in seed funding from international and local investors, allowing it to accelerate its goal of putting the power of big banks in the hands of small businesses.
Singapore-based venture capitalist Golden Gate Ventures and Gentree Fund led the oversubscribed seed financing round. Golden Gate Ventures has interests in digital firms such as Xendit, while Gentree Fund is a private investment vehicle of the Sy Family, which owns Filipino conglomerate SM Group.
Among other foreign investors that participated in the seed funding round are Tribe Capital, Broadhaven Ventures, 1982 Ventures, Saison Capital, and Razorpay, Rohit Mulani of GoTrade, and Abhinay Peddisetty and Chinmay Chauhan of BukuWarung. Goodwater Capital, which has invested in Facebook, Spotify, and Twitter, also supported the funding exercise.
Locally, NextPay’s seed funding was backed by Kickstart Ventures of the Ayala Group, Foxmont Capital, and First Asia Ventures, as well as angel investor Lisa Gokongwei of JG Summit, among many others.
Proceeds of the seed funding will be used to grow NextPay’s suite of services, expand its customer base, and introduce new digital banking solutions to micro, small, and medium enterprises (MSMEs).
“We believe that business banking will continue to digitally evolve, as the Philippines accelerates its digital transformation initiatives. This investment supports our goal of putting the power of big banks in the hands of small businesses,” NextPay chief executive officer and co-founder Don Pansacola said.
The fundraising marks a milestone for NextPay after graduating from the Y-Combinator program in April, when it received $125,000 in pre-seed investment.
“Managing your businesses’ finances efficiently and confidently is mission-critical to success, and NextPay is building industry-leading digital banking solutions for SMEs to better manage their finances: from payroll, to collections, to invoicing. Golden Gate Ventures’ decision to invest in NextPay was ultimately a very easy one: businesses need better banking services, and NextPay was building the best banking platform for Filipino SMEs,” Golden Gate Ventures partner Justin Hall said.
Launched amid the pandemic in 2020, NextPay provides companies, entrepreneurs, and freelancers with digital financial services that were previously unavailable to them because of the steep requirements and high fees that are typically aimed at larger, more developed companies that can afford them.
“NextPay uniquely addresses the local needs of its customers by matching SMEs looking to go digital with mobile and convenient digital financial tools, which scales dynamically with their businesses. As a key infrastructure layer for our budding Philippines startup ecosystem, Gentree believes that NextPay will play a key role in supporting our entrepreneurs and enabling the Philippines digital economy,” Gentree vice president Mark Sng said.
NextPay is a platform that provides underserved customers democratized access to financial services such as digital invoicing, cash management, and batch payments to any bank or e-wallet in the Philippines.
“The success of our seed funding exercise will help us accelerate our plans of introducing more meaningful digital banking solutions, including, but not limited to, corporate cards, loans, and integrations with other platforms focused on MSMEs. We will also be hiring more talent to make the NextPay platform more comprehensive, simple, and easier to use and avail of. We aim to provide the best service and experience so that our customers can focus more on growing their businesses,” NextPay chief experience officer and co-founder Aldrich Tan said.
NextPay seeks to partner and collaborate with other organizations, businesses, and startups for integrations and partnerships, as it expands its digital banking solutions to create a more seamless financial ecosystem for its clients.
Since its launch in 2020, NextPay has processed over $9.1 million (over P457.5 million) in digital transactions for more than 100 businesses with over 3500 employees. Through its pay-per-use model, NextPay offers competitive fees that are lower than usual banking rates. Customers of NextPay also enjoy reduced processing times from as much as 3 days to just 30 minutes or less.
