Globe’s GCash took $393M from MUFG at $5B valuation

InsiderPH reported on Friday [link] that Japan’s Mitsubishi UFJ Financial Group (MUFG) had signed a deal to invest $393 million (?22.7 billion) in GCash’s parent company, Mynt. The investment represents an 8% stake in the company that owns and operates GCash. Ayala Corporation [AC 590.00 ?0.3%; 89% avgVol] also increased its stake by acquiring a similar 8% interest to bring its total holding of Mynt to 13%. The price paid by MUFG and AC values GCash at approximately $5 billion, which is a 150% increase from the $2 billion valuation that GCash had in 2021.

InsiderPH reported that the shares were a mix of primary and secondary shares, “with some private equity investors selling down their stakes to make way for a new shareholder.” MUFG is Japan’s largest lender, and according to Bloomberg [link], has been “exploring opportunities to invest in digital startups in Asia’s emerging markets, where it sees a vast pool of potential customers untapped by traditional banks.” An exact accounting of Mynt’s shareholders is not available, but Globe [GLO 2218.00 ?2.6%; 399% avgVol] and Ant Group are apparently still considered major shareholders. 

MB BOTTOM-LINE: That valuation is amazing, but it’s probably not a surprise to businesses and consumers given how broadly and deeply GCash has integrated itself into Philippine life. While GCash has done well to evolve as an e-wallet provider, MUFG’s investment could signal a heightened focus on lending as a revenue driver. But that’s all just red meat for a potential prospectus to support an IPO. This transaction is doing a lot of heavy lifting for a potential Mynt listing. First, it obviously pegs GCash’s value at a new “floor” which is 150% higher than its previous valuation; any IPO would use this transaction as a stepping stone to an even higher offer price and valuation. Second, it brings in a massive regional strategic investor onboard which is a great signal to other institutional investors. Investing is a real “monkey-see-monkey-do” game, and smaller banks and funds look at an investment by a top-tier bank like MUFG as a seal of approval. They know the potential risks are now spread across a larger number of deep-pocketed and