Globe Telecom's popular financial technology app, GCash, may become a publicly traded company in the Philippines next year, as it considers new investors and a listing overseas.
"We want to do this sooner rather than later. I would estimate sometime in 2025," said Globe CEO, Ernest L. Cu, in an interview on Wednesday. Cu is also the chairman of Globe Fintech Innovations, the holding company of GCash that will handle the initial public offering (IPO).
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Although the preference is to go public in the Philippines, Cu mentioned that they are exploring a dual listing, with a potential second IPO in the US to take advantage of the liquidity in that market. Cu did not disclose the valuation Globe is targeting for GCash or the amount they intend to raise from the IPO.
Mynt, the parent company of GCash, was valued at over USD 2 billion after its last funding round in 2021. Despite GCash's rapid growth and profitability, boasting 94 million users, Cu acknowledged that an IPO might become necessary to satisfy investor interest in liquidity, even though there is no immediate rush to go public.
Globe maintains a substantial 35% ownership stake in Mynt, with China's Ant Group holding a comparable 34% stake in the company. Other investors include Warburg Pincus, Bow Wave Capital, and Ayala.
Ant Group may consider retaining its interest if Globe proceeds with the GCash IPO. Prior to the IPO, GCash attracted significant interest from foreign funds, financial institutions, and private investors looking to invest in the company.
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Cu noted that the valuations are appealing, indicating a potential willingness to accept investments. GCash forms part of Globe's strategy to transition into a technology-focused company, moving away from its traditional telecommunications business.
Cu expressed concerns regarding the plateauing of telco revenue and the challenges faced by telco companies worldwide. Globe reported a 3% increase in first-quarter service revenue to PHP 41.1 billion, with a similar growth rate as 2023. However, Globe's share in Mynt's equity earnings more than doubled to PHP 962 million, accounting for 11% of its pre-tax income.
As major shareholders of Globe, Singapore Telecommunications and Philippine conglomerate, Ayala, the company is also exploring opportunities in sectors like healthcare, which can be enhanced through digital solutions. Cu acknowledged that while their fintech business is profitable and growing rapidly, it still lags behind in terms of revenue.
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