In a significant advancement for financial inclusion, Salmon, a consumer finance application based in Manila, has successfully raised $100 million--$60 million in equity and $40 million in debt. This funding is aimed at providing digital banking solutions to the millions of underbanked individuals in the Philippines.
Founded by Pavel Fedorov, George Chesakov, and Raffy Montemayor, who previously contributed to the success of Russian digital bank Tinkoff, Salmon is poised to revolutionize the lending landscape in the Philippines. Montemayor, having led Tinkoff's expansion in the country since 2016, brings invaluable experience to this new venture.
Fedorov expressed enthusiasm about the potential for innovation in Southeast Asia, highlighting the Philippines as a prime market for disruption within the financial services sector. With a young and tech-savvy population, the country is rapidly evolving in mobile technology, yet its financial infrastructure has lagged behind.
Salmon aims to serve underbanked Filipinos who often lack credit history or are dissatisfied with existing lenders. In a strategic move, the company acquired a rural bank established in 1963, allowing it to secure a banking license and offer a comprehensive range of financial products, including revolving credit lines, cash loans, and motorbike loans.
"We began by addressing the most challenging aspects of lending and have since expanded our offerings," Fedorov shared. "Traditional banks struggle to navigate the current credit market infrastructure in the Philippines, which is why we're implementing a digital approach."
Salmon's innovative process allows customers to apply for loans via their mobile devices, receiving decisions in as little as 20 seconds. By utilizing real-time behavioral and digital data for credit scoring, the company can quickly adjust loan limits for timely repayments. The credit product features a grace period of up to 62 days, making it interest-free for punctual borrowers.
With the new influx of capital, Salmon plans to scale its operations and develop additional financial products. Fedorov also mentioned the possibility of international expansion within the next two years if they successfully establish themselves in the local market.
The dual financing structure of this funding round was intentional, as Salmon requires both equity for operational growth and debt to support customer loans. Notable investors in this round include Spice Expeditions, Washington University Investment Management Company, and Moore Strategic Ventures, among others. To date, Salmon has raised a total of $310 million, with $160 million in equity and $150 million through bonds.
This funding marks a pivotal moment for Salmon, positioning it to significantly impact the financial landscape in the Philippines and potentially beyond, fostering greater financial accessibility and innovation.