This Filipino Tech Startup Just Raised P1.4 Billion in Funding
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Great Deals Ecommerce Corp raised a total of $30 million (about P1.4 billion) in a Series B funding round, the company announced Wednesday (May 19). That puts the total amount the company has raised in private equity funding at $42 million (P2 billion).
This latest funding round was led by local logistics firm Fast Group with the support of CVC Capital Partners, one of the world’s largest global private equity firms with $118 billion in assets under management. Private equity firm Navegar, which infused the initial $12 million into Great Deals during Series A round last year, also participated.
Great Deals founder and CEO Steve Sy said there were many suitors, but that he chose Fast Group for its logistics expertise.
“There's value in the strategic partnership of having a logistics company as part of your right hand, especially in terms what we call the ‘Golden Triangle’ of the digital economy,” Sy told Esquire Philippines. “So as an ecommerce enabler, having a logistics company will accelerate our growth even further."
“The Fast Group sees a lot of synergies with Great Deals in building capability,” William Chiongbian, group president and CEO of Fast Group said in a statement. “We are privileged to contribute to the growth of Philippine e-commerce, as it relies heavily on a strong supply chain backbone.”
“We are thrilled to be teaming up with Steve and Great Deals, the country's largest e-Commerce enabler,” said Brice Cu, managing director and head of the Philippines for CVC Capital Partners. “We envision strategic collaborations between Great Deal's high-growth e-Commerce solutions and Fast’s leading position in Philippine logistics. This partnership also marks Fast’s first M&A transaction since CVC’s investment less than six months ago.”
Great Deals founder and CEO Steve Sy with Fast Group president and CEO William Chiongbian
Sy said most of the funds will go to build its network of micro fulfillment centers-warehouses measuring 150 to 300 square meters where smaller items like fresh and frozen food and medicine are stored before being delivered to consumers. The company currently has 10 of these centers in Metro Manila and will open another one soon in Taytay, Rizal.
"With the network of micro fulfillment centers in key urban cities, we will be able to deliver goods in less than one hour once it's ordered,” Sy says. “That what we call ‘instant commerce.’ We want to spearhead that here in the Philippines.”
Sy also plans on building regional “mega” fulfillment centers, or much bigger warehouses where the rest of the merchandise are stored. The one in Marilao, Bulacan measures 70,000 square meters sitting on a 10-hectare property and is fully automated.
Another plan is to build an omni-channel business solution called Zappy-a system that can turn a business’ social media pages into online stores.
“If you have Facebook, Instagram, Tiktok, or Viber, we can set up an online shop and it's already integrated with different payment gateways, like credit card, GCash, GrabPay, (even) COD (cash on delivery),” Sy explains. “And we can even deliver within one hour.”
The founder says the company is already developing the Zappy platform and has partnered with an on-demand logistics partner for it.
“With this funding, we will be able to boost this solution to so many SMEs, for them to be able to digitize their stores,” he says.
Finally, Sy said the additional funding will go a long way in the company's efforts to develop and improve tech not just to scale up the business but also in terms of data analytics and business intelligence. It’s even developing augmented reality that will enhance the online shopping experience for Filipino consumers.
As an ecommerce enabler, Great Deals works with companies and brands to sell their merchandise online-everything from digital content, web design, analytics, chat support, warehousing and fulfillment. The company’s client list includes Nestle, Unilever, Samsonite, L’Oreal, Reebok, Abbott, and many more.
Asked about the financial health of the company, Sy said Great Deals managed to grow “four times” in 2020, despite the challenges of the pandemic.
“So we're already a multi-billion peso company,” he said. “In 2021, we're gonna grow at least 100 percent.”
Like many other startups, the plan, Sy added, is to eventually expand to other countries in the region. The founder also said they are looking at investing in other startups in the ecommerce space.
“If you will ask me, of course we have an ambition to go public,” Sy said. “Yeah, we want to have an international IPO someday.”
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