New funding for PH digital payments startup eyeing remittance market
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Ayannah CEO Mikko Perez
Ayannah has raised $4.5 million from investors
SAN FRANCISCO, California — , a digital payments startup based in the Philippines, has raised $1 million in new funding, reported technology news source TechCrunch .
The funding came from Japanese venture capital firms and , the investment vehicle of Teruhide Sato, president and group CEO of .
Returning investors led by and also participated in the round. This brings the total Ayannah has raised so far to over $4.5 million, TechCrunch reported.
Ayannah is an “ON3 company,” the annual pitching competition for Filipino startups in which winners receive Silicon Valley mentorship and a grand prize residency at the Plug and Play Tech Center. ON3 is hosted by the Science and Technology Advisory Council – Silicon Valley.
TechCrunch also reported that Ayanna is banking on remittances from the 13 million overseas Filipinos as well as revenue growth from its software as service business and increasing demand for it services from domestic workers.
Ayannah’s new funding comes as remittances in the Philippines continue to increase. , up from $9.809 billion in the same period in 2013, according to the Philippines’ Central Bank. Most remittances were sent from the U.S., Saudi Arabia, the United Arab Emirates, the UK, Singapore, Japan, and Hong Kong.
Article continues after this advertisementAyannah founder and CEO told TechCrunch that “the international (from overseas into the Philippines) remittance market is approximately $25 billion. It has been growing steadily over the past several years and trends (increasing migration of Filipino workers abroad, labor shortages in Japan and other OECD countries due to aging populations) support continuing growth in international remittances into the Philippines. There are over 10 million overseas Filipino migrants (of which around 8 million are unbanked/underbanked).”
Article continues after this advertisementOverseas workers currently use money transfer services like Western Union, Moneygram, Trans-fast and iRemit, as well as banks, to send money to their relatives in the Philippines. Perez told TechCrunch that Ayannah does not seek to compete with these services, but instead partner with them so users can send goods and services to people in the Philippines online.
“We are not trying to eliminate money transfers/remittances but we are giving migrants more options on how to support their beneficiaries in their home countries without necessarily infringing on the value proposition of money transfer operators,” Perez says.
Ayannah hopes to expand to the remittance markets of countries in Latin America, South Asia, and Africa, and eventually become “Amazon for the next four billion,” says Perez. The startup will scale up by adding more money transfer operators and banks as collecting agents in countries with large communities of overseas foreign workers, he explains, with the goal of reaching the majority of workers without bank accounts.
“Other growth opportunities we are pursuing — providing financial services to the 70 million unbanked/underbanked Filipinos residing the Philippines–many of whom are domestic migrants (having migrated from the countryside to the big cities in search of jobs and income opportunities). These domestic migrants remit even larger amounts of money to the countryside,” says Perez.
“The Gates Foundation commissioned a study and estimates that domestic remitttances within the Philippines is at least $36 billion and international NGO, Opportunity International, estimate it to be even higher and closer to $60 billion. This market, already huge, is still highly inefficient.”
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