Salmon secures $100M to expand digital credit for underbanked Filipinos

The Philippines is home to millions of adults who remain financially underserved, and the country’s consumer lending market is now accelerating to meet their needs. Salmon, a Manila-based consumer finance app, has just secured a substantial $100 million in funding,comprising $60 million in equity and $40 million in debt,to expand digital banking access for underbanked Filipinos.

Founded by Pavel Fedorov, George Chesakov, and Raffy Montemayor, all former employees of Russian digital bank Tinkoff, Salmon was launched in March 2022 after the trio left Tinkoff. Montemayor had been Tinkoff’s first employee in the Philippines, leading its local expansion since 2016. “We saw that the Philippines and broader Southeast Asia were proving themselves in terms of innovation,” Fedorov told TechCrunch. “The Philippines is probably one of the most exciting markets for disruption in the financial services industry in the world.”

The Philippines boasts one of the world’s most active mobile markets, with a young, tech-savvy population often called the social media capital of the globe. Yet its financial infrastructure has lagged behind. Salmon is targeting underbanked Filipinos who have little to no credit history, as well as those frustrated by the reliability issues of traditional lenders.

To fast-track its operations, Salmon took a strategic shortcut: in January 2024, it acquired a rural bank originally established in 1963, thereby securing a banking license. The startup is now building a comprehensive suite of financial products, including revolving credit lines, installment loans, cash loans, motorbike loans, and deposit accounts. “We started by solving the hard things first, lending, and then followed up with many other products. By now, we have around seven or eight different products,” Fedorov said. “It’s impossible for a traditional bank to solve this problem given the current credit market infrastructure in the Philippines.”

Fedorov explains that getting a loan for something like a motorbike often involves weeks of paperwork, home visits, and waiting. Salmon is changing that by digitizing the entire process. “Customers fill out a form on their phone, upload a few documents, and get a decision in 20 seconds. The bike is ready for pickup the next morning. Instead of using credit history, we score borrowers in real time using behavioral and digital data, and raise limits quickly for those who repay on time,” he said.

Salmon’s credit product includes an interest-free grace period of up to 62 days for borrowers who pay on time. Its subsidiary, Salmon Bank, also offers term deposits with interest rates as high as 8%.

With this fresh capital, Fedorov says Salmon will prioritize scaling its operations and developing new products. If the company executes well in the Philippines, it may expand internationally within the next two years. The dual financing structure of the recent round was intentional: as a lending business, Salmon requires equity for operations and growth, and debt to fund the loans it extends. For its debt portion, the company turned to the Nordic bond market.

To date, Salmon has raised a total of $310 million, split into $160 million in equity and $150 million through bonds. Investors in the latest round include Spice Expeditions, Washington University Investment Management Company (WUIMC), Moore Strategic Ventures, and FJ Labs. Previous backers include IFC, ADQ (Abu Dhabi’s sovereign wealth fund), Lunate, and Antler VC.