Advance, a Philippines-based fintech startup that operates a salary-on-demand platform, has announced raising a total of $16 million in its pre-Series A funding round co-anchored by Vietnam’s Do Ventures and emerging market credit provider Lendable.
DealStreetAsia first reported in December that the startup raised $6 million in equity in the latest funding round, which also marked Do Ventures’ first investment in the Philippines.
Advance co-founder and CEO Jaime de los Angeles confirmed that the $16 million raised by the company included the $6 million that DealStreetAsia had reported and a $10-million debt deal with Lendable to fuel the growth of Advance’s credit products and support its loan portfolio.
In the latest announcement, Advance said the funding round was also backed by Phoenix Holdings, Kaya Founders, Foxmont Capital, Oyster Ventures, Crossocean Ventures, Wavemaker Partners, Next Billion Ventures, Integra Partners, and Accion Venture Lab.
With the fresh funding and Do Ventures as co-anchor, Advance said it is also expanding into Vietnam through the acquisition of BravoHR, a platform that provides digital solutions for employee engagement, benefits, and rewards in the country.
“We are entering a new market and beefing up product lines to address the greater financial needs of employees and businesses,” De Los Angeles said.
The success of the fundraising, he added, supports the startup’s goal of providing fair and accessible financial services, especially for underserved employees.
“This was a tough economic climate, which makes our fundraise all the more noteworthy,” De Los Angeles earlier told DealStreetAsia.
Since 2018, Advance has been providing salary advances and other financial services to underserved employees in the Philippines, where almost half of the population remains unbanked. Its clients include major industry players like Sitel Philippines, Inspiro, Cebuana Lhuillier, and ePerformax.
The startup helps the Filipino workforce access salary without waiting for payday to avoid borrowing money for daily needs. De Los Angeles said the platform does not offer a loan but acts as a financial bridge between employers and employees.
Currently, most Filipino workers live paycheck to paycheck, forcing them to borrow cash for their daily needs. As bank loans are not easily accessible, especially to wage earners, workers opt to borrow from predatory lenders who can charge interest rates of up to 20%.
For employers, Advance allows them to grant financial assistance to workers without having to tap into company resources.
In May 2020, the platform announced raising an undisclosed amount in its seed funding round backed by Southeast Asia-focused venture investor Wavemaker Partners. The round was led by US-based Next Billion Ventures and joined by Dymon Asia Ventures and Accion Venture Lab.
Do Ventures, the co-anchor in the funding round, was one of the at least seven regional VCs that entered the Philippines for the first time in 2022, according to a report by Foxmont Capital Partners and Boston Consulting Group.
The others include Reefknot Investments, Alpha JWC Ventures, East Ventures, TNB Aura, Quest Ventures, and January Capital.