Through Globe [GLO 2818.00 7.06%], the Ayala Family owns a stake in Mynt, the parent company of GCash, which just reported that it has achieved profitability three years ahead of schedule.
Mynt’s CEO, Martha Sazon, credited the explosion in new users and the accompanying transactions for the fintech darling’s steep rise in income.
Mynt reported that total registered users increased from 33 million to 55 million in 2021, with total transaction value handled by the platform exceeding P3.8 trillion.
This beat Mynt’s own internal target of P3 trillion for 2021.
Mynt said that at its peak in 2021, GCash recorded over 26 million user log-ins and processed over 17 million transactions.
Ms. Sazon said that Mynt would focus on consumer credit/lending to further monetize its growing user-base, through lending products like GLoans that disbursed ?1 billion in loans just 6 months after its inception.
MB BOTTOM-LINE
The significance of GLO’s investment in Mynt continues to grow.
The recent investment by Warburg Pincus pegged Mynt’s value at more than $2 billion USD, and chances are great that its value has only grown since that valuation was established three months ago.
While the user growth is eye-popping, the rate of user growth might soon begin to hit a wall as the platform onboards a greater and greater majority of the country’s adult population.
It only has about one good year of “straight-line” user growth left at this rate before the entire country is GCashed, so this is probably why GCash is venturing into other profit centers, like consumer loans, instead of simply continuing to juice its user-base stats.
I’m not sure how GCash compares to other digital transaction platforms across SE Asia, but at some point, both Ant Financial and Mynt’s American investors will probably want to see GCash replicate its Philippine success in other markets.
I’m sure there are considerable legal and technical barriers to entry to each new foreign market, but other apps and platforms have already made some (all?) of these transitions before. GCash wouldn’t be blazing that trail.
It will be interesting to see how Mynt manages the incredible amount of momentum that GCash has this year; will a foray into other silos like consumer credit provide enough valuation upside as the velocity of new Philippine sign-ups slows, or will they need start gobbling up users in other countries to keep the valuation needle moving?
--