Online pawnshop secures funding from global investors

MANILA, Philippines - PawnHero has been growing rapidly since it opened last year, securing an undisclosed funding from global investors led by the Kaikaku Fund, a SoftBank affiliate.

Several other venture capitalists and investors from the region and Silicon Valley have steadily followed suit.

Other participants in the round were global investors 500 Startups, and IMJ Investment Partners.

PawnHero co-founder and chairperson David Margendorff said the company would use the funds for talent acquisition and continuing its mass outreach in the Philippines as the company continues to expand.

“Even more Filipinos will know, that they can now pawn online without leaving their homes; at half the interest of what other pawnshops charge,” he said.

Margendorff said investors have noted PawnHero’s ability to give more financial power to the unbanked while revolutionizing the pawnshop industry.

“Most startup investors don’t go to pawnshops to get loans. But millions of people in Southeast Asia do every day. PawnHero will literally change their lives, and in the process, the region’s next big startup success story will emerge,” said Khailee Ng, managing partner of 500 Startups.

Echoing the same view, Yasu Seo, general manager of IMJ Investment Partners said the online pawnshop can indeed help unbanked citizens.

“The online pawnshop is exactly the kind of innovation I believe can help unbanked citizens. The Philippines is the ideal market to start the service, as pawning is the major financing method instead of banking for its people,” Seo said.

Teddy Himler, vice-president of the Kaikaku Fund likewise said PawnHero is able to reinvent the traditional industry for an online era, while addressing the borrowing needs of an underbanked population.

PawnHero earlier received funding from 2Go chief executive officer Sulficio Tagud.

As an online pawnshop, PawnHero accepts a wider range of items – not limited to jewelry – and offers higher appraisals. With all processes done online, PawnHero is able to charge half the interest rate of traditional pawnshops. In addition to that, it is easier for Filipinos to access quick cash when they need it since they don’t need to leave the comfort of their own homes.