Chinese technology giant Tencent Holdings, the developer of WeChat, and a United States-based fund are entering PLDT Inc.’s digital innovations arm — a move seen to accelerate the use of cashless payments in the Philippines over the next few years.
In a joint statement, PLDT said Tencent and investment firm KKR will invest up to $175 million (P9.5 billion) into PLDT unit Voyager Innovations, which operates the mobile wallet PayMaya.
The deal was branded yesterday as the single largest investment to date in a Philippine tech company.
“We can scale up and that’s what Tencent and KKR want to do,” PLDT chair and CEO Manuel V. Pangilinan told reporters in a briefing on Thursday. “All three of us are committed to making this a successful venture.”
Based on the statement, the deal would close in the fourth quarter of 2018, however, Pangilinan said new investors were expected to come onboard. Under the terms, Voyager will issue new shares to Tencent and KKR, which means funds will be mainly used for business expansion.
PLDT will remain the majority shareholder of Voyager.
Pangilinan said the investment amount could eventually be increased by $50 million, bringing the total amount to $225 million, as talks with other investors, including the World Bank’s International Finance Corp., are sealed.
Once that milestone is hit, PLDT’s stake would fall below 50 percent, Pangilinan said. He clarified that PLDT will remain the single-largest investor of Voyager.
The Philippines has more than 100 million people, most of whom do not have a bank account.
However, high mobile penetration and its relatively young population make the country an attractive market for digital payments and gaming platforms, where Tencent has a significant presence.
Orlando Vea, CEO of Voyager, said the partnership would help PayMaya reach about 20 million customers by 2020. He did not say how many users PayMaya currently had.
Tencent’s investment in the Philippines echoes the move last year by Chinese billionaire Jack Ma. Last year, Ma’s Ant Financial, which developed Alipay, took a stake in Globe Fintech Innovations Inc., which runs the GCash mobile wallet, a rival of PayMaya in the Philippines.
The entry of new investors also eases the financial commitments of PLDT, which poured around P10 billion into Voyager since it was established five years ago.
“It gives [Voyager] the wherewithal to pursue [expansion] without PLDT being pressured for cash calls moving forward for the next three to four years,” Pangilinan said.
He said the deal would also boost Voyager’s other platforms, which include Lendr, an online lending service, and Freenet, which allows users to access certain websites without paying data fees.
“Having global powerhouses such as KKR and Tencent as investors in Voyager Innovations demonstrates not only their confidence in the company’s ability to execute its vision, but also their confidence in the Philippine technology industry as a whole,” Pangilinan said. /ee