Salmon raises $100M in equity and debt to bring digital credit to underbanked Filipinos

Salmon, a consumer finance application based in Manila, has successfully raised $100 million through a combination of $60 million in equity and $40 million in debt. This funding aims to enhance digital banking services for the millions of unbanked adults in the Philippines, a country with a rapidly evolving consumer lending landscape. Founded by Pavel Fedorov, George Chesakov, and Raffy Montemayor—former employees of the Russian digital bank Tinkoff—Salmon is poised to make a significant impact in the financial services sector. Montemayor was notably Tinkoff's first employee in the Philippines, where he played a crucial role in the bank's expansion since 2016. After leaving Tinkoff in March 2022, the trio established Salmon, recognizing the Philippines as a fertile ground for financial innovation. Fedorov remarked in an interview, "The Philippines is one of the most exciting markets for disruption in the financial services industry globally." With a young, tech-savvy population, the Philippines is a vibrant mobile market, yet its financial systems have struggled to keep pace with technological advancements. Salmon aims to address this gap by targeting underbanked Filipinos, particularly those with limited credit history or dissatisfaction with existing lenders. In a strategic move, Salmon acquired a rural bank established in 1963 to secure its banking license, facilitating its entry into the market. The startup is developing a comprehensive range of financial products, including revolving credit lines, installment loans, cash loans, motorbike loans, and deposit options. "By addressing the most challenging aspects of lending first, we are expanding our offerings," Fedorov stated, noting that the company currently features around seven or eight different products. Fedorov highlighted the inefficiencies in traditional lending processes, where obtaining a loan for a motorbike can involve extensive paperwork and delays. Salmon aims to streamline this by digitizing the entire application process. Customers can fill out a form on their smartphones, upload necessary documents, and receive loan decisions within 20 seconds, with vehicles ready for pickup the following day. Instead of relying on credit history, Salmon evaluates borrowers using real-time behavioral and digital data, allowing for quicker adjustments in credit limits for timely repayments. One of Salmon’s standout features is its credit product, which offers a grace period of up to 62 days, making it interest-free for customers who meet their repayment schedules. Additionally, its subsidiary, Salmon Bank, provides term deposits with interest rates reaching up to 8%. With the newly acquired capital, Salmon plans to focus on scaling its operations and introducing new products. If successful, international expansion could be on the horizon within the next two years. The company’s dual financing structure is a strategic choice, as Salmon requires both equity for operational growth and debt to finance customer loans. For its debt funding, Salmon tapped into the Nordic bond market. To date, the startup has raised a total of $310 million, comprising $160 million in equity and $150 million through bonds, with contributions from investors such as Spice Expeditions and Washington University Investment Management Company, among others.