Ayannah, a digital payments startup based in the Philippines, has raised $1 million in new funding from Japanese venture capital firms IMJ Investment Partners and Beenos, the investment vehicle of Teruhide Sato, president and group CEO of netprice.com. Returning investors led by Siemer Ventures and Golden Gate Ventures also participated in the round. This brings the total Ayannah has raised so far to over $4.5 million.
The startup is hedging its future on remittances from the 10 million Filipinos who work overseas, as well as revenue growth from its SaaS business, and increasing demand for it services from domestic workers.
Ayannah’s new funding comes as remittances in the Philippines enjoy strong growth. Data from the Central Bank of the Philippines showed that personal remittances grew 6.1 percent to $10.404 billion in the first five months of this year, up from $9.809 billion in the same period in 2013. Most remittances were sent from the U.S., Saudi Arabia, the United Arab Emirates, the UK, Singapore, Japan, and Hong Kong.
In an email, Ayannah founder and CEO Mikko Perez 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).”
Overseas 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 says 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.
“Sendah is also differentiated because it has become the one-stop shop for mobile commerce for Filipino migrants – they can send airtime credits, micro-insurance, health insurance packages, even gift certificates to major retailers such as SM, Jollibee, Mercury Drugstore, etc. We really focus on giving migrants other options that will truly improve the quality of life of their beneficiaries.”
The startup serves overseas workers through Sendah, its business-to-consumer site. Sendah allows users to remit money to family members; purchase goods as well as services like insurance for them; and or buy credits for their mobile phones.
Sendah Direct is Ayannah’s business-to-business software-as-a-service platform and targets migrant workers who have stayed within the Philippines. It allows corporations, chain stores, individual entrepreneurs, and other businesses to offer digital commerce and payment services to customers without a bank account.
Ayannah’s goal is to make Sendah Direct “one of the largest digital payment networks in the Philippines” and it says the business has had over three years of revenue growth.
In the future, 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 is 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.”
In a statement, Sato said “Ayannah has launched some very interesting services focusing on the 10 million overseas migrant Filipinos, 8 million of whom are unbanked and the 70 million unbanked Filipinos in the Philippines, many of whom are domestic migrants moving from the countryside to the cities in search of income opportunities.”