GCash Prepares for IPO Amid Market Uncertainties

GCash, an Alibaba-backed e-wallet, is making strides in the competitive digital banking landscape. With 81 million active users and 2.5 million merchants and social sellers as of May, the company has achieved impressive scale without excessive cash burn. Furthermore, GCash became EBITDA profitable three years ahead of schedule, according to the company’s leadership. Now, the company is gearing up for an Initial Public Offering (IPO). The timing, however, remains uncertain.

Learning from Paytm’s IPO Experience

GCash is keen to avoid a lackluster IPO, similar to the one experienced by Indian fintech giant, Paytm, a few years ago. Delaying the IPO for too long led Paytm to rush into the process under pressure to provide investor returns. GCash’s leadership stated in November 2022 that the company still has many regulatory obligations to fulfill before going public. The IPO is expected to happen when market conditions improve.

Philippine Stock Exchange’s Outlook on IPOs

Despite the challenges posed by elevated inflation and higher interest rates, Ramon Monzon, President and CEO of the Philippine Stock Exchange, expressed optimism about scheduled IPOs for the year. Monzon noted a direct correlation between inflation, interest rates, and market performance. The exchange plans to raise about P160 billion (US$2.81 billion) from IPOs this year.

GCash’s Strategic Move with ECPay

In October, GCash’s parent company, Globe Telecom, sold its 77% majority stake in e-commerce platform Electronic Commerce Payments Inc. (ECPay) to Mynt, GCash’s operator. The P2.31 billion deal, currently under various reviews, is expected to be mutually beneficial. ECPay will be able to leverage Mynt’s digital expertise, while GCash will differentiate itself further in the crowded digital payments market. The acquisition will strengthen GCash’s distribution network, as ECPay allows merchant partners to process bill payments and load top-ups, among other services.