Japan’s Mitsubishi UFJ Financial Group Inc. (MUFG) has finalized a $393 million investment to secure an 8% ownership stake in Globe Telecom Inc.’s GCash, valuing the leading Philippine fintech at $5 billion. This strategic move has significantly impacted Globe Telecom’s stock, which saw its highest surge in over a year on Friday.
MUFG’s investment will be directed towards Globe Fintech Innovations Inc. (Mynt), the entity responsible for managing GCash. Concurrently, Ayala Corp., the parent company of Globe, will enhance its stake in Mynt by purchasing an additional 8% interest, raising its total ownership to approximately 13%.
As Japan’s largest financial institution, MUFG has been actively seeking opportunities in Asia’s burgeoning digital startup ecosystem, recognizing the untapped potential in emerging markets. The bank stated that this acquisition aligns with its strategy to “further capture the Asia-Pacific region’s growth.”
The investment arrives as the Philippines experiences a surge in digital payments, which accounted for over half of the country’s retail transactions last year. GCash, boasting around 94 million users in a country with a population exceeding 112 million, gained considerable traction during the pandemic due to increased demand for cashless solutions.
Prior to the official announcement, InsiderPH and Nikkei disclosed details of the transaction.
MUFG’s recent investment portfolio includes a $200 million stake in Southeast Asian digital finance firm Akulaku in 2022 and a recent investment in Ascend Money, a Thai mobile payment company, in June.
Globe Telecom, which had previously indicated plans for a public offering of Mynt, reported that the recent deal more than doubled Mynt’s valuation from its $2 billion figure during the last funding round in 2021. Mynt reported a net income of 6.7 billion pesos ($115 million) for 2023.
Shareholders in Mynt also include China’s Ant Group, Warburg Pincus, and Bow Wave Capital, as stated by Globe CEO Ernest Cu in May.
The acquisition underscores Globe’s strategic shift towards becoming a tech-driven enterprise, moving away from its traditional telecommunications focus. Following the news, Globe’s shares climbed by as much as 4% to 2,248 pesos, the highest level since January 2023.
Despite a steady 3% growth in service revenue in the first quarter, Globe’s earnings from Mynt more than doubled, now representing 11% of its pre-tax income.
