MANILA, Philippines—First Circle, a pioneering lending platform dedicated to small and medium enterprises (SMEs), has pulled in an additional $26 million in a fresh Series A funding round. Venturra Capital led the latest cycle with follow-on investment from international firms Insignia Ventures Partners, Silverhorn Investment Advisors, and tryb Group underscoring continued strong venture capital interest in Southeast Asia.

The latest fundraising will enable the startup to branch out nationwide, with an eye towards hitting similar markets in Southeast Asia in the midterm. It’s looking to increase its capital base to over $100 million next year to keep up with soaring demand in the region.

“We’ve created a new business model superior to traditional peer-to-peer lending models which make us more scalable, stable, and enable us to provide a better customer experience,” said Patrick Lynch, CEO, and co-founder of First Circle. “Our focus on supply chain and trade financing has enabled us to reduce our average approval time to 5h regardless of prior credit history—and what we’ve found is, every time we help a small business earn their first-ever credit facility, their whole community benefits.”

“What sold us on First Circle was their unique risk-management capabilities,” said Stefan Jung of Venturra Capital who joins the Board. “They’re doing the hard things really well which enable them to keep prices low for customers, and at the same time deliver attractive, consistent returns for their funding partners.”

“Cashflow management is the number one reason why small businesses go out of business. First Circle provides an incredibly easy and affordable service for small businesses to thrive and solve cash flow challenges. They have developed a wholly digital service in what is still a heavily paper-based environment,” said Yinglan Tan, Founding Managing Partner of Insignia Ventures Partners. “This has opened up the market in the Philippines and we're excited to support their regional expansion next year.”

This comes as the Philippine government rolls out a slew of initiatives to champion the SME sector, including fast-tracking a law that allows assets other than land as collateral and pushing for greater adoption of digital channels. Beginning next year, President Rodrigo Duterte has also pledged more government assistance to budding entrepreneurs[1].

By some estimates, the credit gap in the Philippines remains at $50 billion. Latest World Bank Findex data also ranks it as one of the countries with the highest ratio of business owners borrowing capital from relatives and friends.

“We believe First Circle will redefine how small businesses consume financial services first in the Philippines—then eventually the rest of Southeast Asia,” Jung adds.

First Circle is supported by the Philippine Department of Trade and Industry and the Bangko Sentral ng Pilipinas with Secretary of Trade Ramon Lopez and Deputy Governor Fonacier joining today’s funding announcement at First Circle’s office in Manila, Philippines.