Salmon raises $100M in equity and debt to bring digital credit to underserved Filipinos

The Philippines has millions without a bank adults, and its consumer lending market has taken hold. Salmon, a Manila-based consumer finance app, has just raised $60 million in debt and $40 million in debt to bring digital banking to the Philippines.

Salmon was founded by Pavel Fedorov, George Chesakov, and Raffy Montemayor, all of whom previously worked at the Russian digital bank, Tinkoff. Montemayor was, in fact, Tinkoff’s first employee in the Philippines, and led the company’s growth in the country since 2016. In March 2022, the trio parted ways with Tinkoff, and founded Salmon.

“We saw that the Philippines and Southeast Asia are showing themselves technologically,” Fedorov said in an interview with TechCrunch. “The Philippines is perhaps one of the most exciting emerging markets for the financial services industry in the world.”

Indeed, the Philippines is one of those countries very active mobile markets in the world is a child, tech savvy peopleand is often referred to as the social capital of the world. But his financial system has struggled to thrive.

Salmon is targeting Filipinos who don’t have a lot of money, who have poor credit history, and people who are unhappy with their lenders. trust issues.

In particular, Salmon took a shortcut to set up shop: The company in January 2024 found a rural bank established in 1963 to obtain a banking license. The startup currently offers a wide range of financial products, including lines of credit, equity loans, cash loans, motorcycle loans, and deposits.

“We started by solving the difficult things first, the lease, and then followed many other things. At the moment, we have seven or eight different things,” said Fedorov. “It is impossible for a traditional bank to solve this problem because of the current market situation in the Philippines.”

Fedorov says he is attacking a market where leasing, say, a motorcycle, sometimes requires weeks of paperwork, home visits and waiting. Salmon is said to be changing this by stopping the entire process.

“Customers fill out a form on their phone, put a few documents, and get a decision in 20 seconds. The bicycle is ready to pick up the next morning. Instead of using the credit history, we list borrowers in real time using behavioral and digital data, and raise the limit quickly for those who repay on time,” he said.

Salmon’s loan offers a 62-day grace period, which Fedorov says makes it interest-free for borrowers who pay on time. Its subsidiary, Salmon Bank, also offers long-term deposits at up to 8% interest.

With the new headquarters, Fedorov said Salmon will prioritize expanding its business and creating new products. If the company succeeds in this market, it looks to expand globally in the next two years, he added.

The current dual currency structure was developed, Fedorov said. As a venture capital business, Salmon needs two types of capital: capital to fund operations and growth, and debt to pay off loans to customers. Because of its debts, the company turned to the Nordic bond market, he said.

Salmon has raised $310 million to date, of which $160 million was the equivalent of $150 million through bonds.

Investors in the latest round include Spice Expeditions, Washington University Investment Management Company (WUIMC), Moore Strategic Ventures, and FJ Labs. Its previous sponsors include IFC, ADQ (Abu Dhabi’s sovereign wealth fund), Lunate, and Antler VC.