PHILIPPINES-based lending startup First Circle has secured $1.3 million in fresh venture capital funding, boosting the firm’s total seed funding to $2.5 million, the company said in a statement recently.
Founded in 2015, First Circle aims to provide short-term working capital to small and medium enterprises in the Philippines.
The latest round of funding follows an initial round in October last year that raised $1.2 million, mostly from London-based venture capital firm Key Capital.
The recent fundraising, which was completed about two weeks ago, was led by global venture capital firms Accion Venture Lab and DeepBlue VC. First Circle’s existing investors Key Capital, 500 Startups, and IMJ Investment Partners also contributed to the latest fundraising round, along with “an undisclosed sum of debt funding,” according to a report by venture capital monitor DealStreetAsia.
First Circle CEO Patrick Lynch said, “We plan to use the latest funds to further develop First Circle’s technology and data analytics platform. This includes proprietary software and credit scoring to increase access to financial services for the underserved in the Philippines, and later expand access to credit in Southeast Asia.”
In a separate interview with DealStreetAsia, Lynch said that the firm expects to be lending “in tens and millions of dollars to SMEs this year and probably raise a Series A round before 2017 ends.”
“We basically raised these latest funds because Accion is the best investor in our space and we went into the process,” he added.
Lynch also said that First Circle would focus on investing to improve its service locally before it considers reaching out to SMEs in other parts of Southeast Asia.
In a separate statement, Accion Venture Lab managing director Vikas Raj said, “With First Circle as a partner, we can advance access to capital for small businesses in the Philippines and beyond.”
Accion Venture Lab is part of the global nonprofit group Accion, which has funded at least 25 startups in 20 countries since its launch in 2012, investing about $10 million.
While Lynch is optimistic about the growth of First Circle’s business, he told DealStreetAsia that the SME market segment in the Philippines is so large that “it will take some time before the company can reach a penetration rate.”