China establishes US$1.44 billion Asia Fintech Fund of Funds (FOF) focusing on M&A deals

China establishes US$1.44 billion Asia Fintech Fund of Funds (FOF) focusing on M&A deals

The influence of China in advancing fintech is likely to grow even stronger in 2017 with the establishment of Asia FinTech Fund Of Funds (FOF) which has accumulated a substantial funding of 10 billion yuan (approximately US$1.44 billion) to invest in fintech startups across Asia.

Based in Beijing, the foundation was formed on December 27 and is led by Hong Kong-listed Credit China FinTech Holdings along with a number of other Chinese companies such as Shanghai Xinhua Distribution Group, China Huarong International, Jilin Province Investment Group Corp Ltd and seven other corporate partners.

“In addition to the aforesaid state-owned enterprises and private enterprises, China Cultural Industry Association, New Times Trust Co Ltd, Shenzhen China Create Group, N-Securities Co Ltd, Beijing Yongyu Investment, Tianjing Borong and Juntong Capital are also partners of the fund,” Credit China FinTech said in a statement,

The fund will primarily be used to target financial and tech mergers and acquisitions (M&A) in Asia, with investments, focused on fintech fields such as big data, artificial intelligence, mobile payments, supply chain financing, and blockchain technology.

“The fund already has projects in the pipeline, covering big-data driven consumption financing, blockchain infrastructure provision, and AI-based credit service platforms,” according to Xie Sha, the Managing Partner of Asia Fintech FOF.

The investment fund also comes as a signal showing China’s growing status in dominating the financial and technology market in the international platform.

A report released by DBS and consultant EY has also ranked China as the number one fintech destination, overtaking London, New York and Silicon Valley as the world’s “FinTech Hub”.

This result is largely contributed by the developments across multiple hubs, such as Shanghai, Beijing, Hangzhou in East China’s Zhejiang Province and Shenzhen in South China’s Guangdong Province.

On a similar note, the Asia FinTech FOF, also comes as the second fund of funds (FOF) after the Zhongguancun FOF, which was established in 2015 with an allotted fund of 30 billion yuan (approximately US$ 4.32 billion).

Asia FinTech FOF attempts to establish growth in the fintech industry is another attempt in China’s cap to establish its economic dominance in the Asia-Pacific region- especially if Beijing can compete with Singapore or London in the fintech sector.

“Leveraging on the fund partners’ experiences and competitive advantages in brand recognition, industry resources, and expertise, the Fund aims to invest in innovative FinTech enterprises with potential and help them to be the FinTech leaders with our technical know-how and capital resources,” said Sheng Jia, the Credit China FinTech Executive Director.

By Vivian Foo, Unicorn Media

India-based instantPay secures pre-Series A funding from RB Investments, Kaleden

India-based instantPay secures pre-Series A funding from RB Investments, Kaleden

A digital payments and financial services startup, instantPay has announced that it has secured its pre-Series A funding round from Singapore-based investors – RB Investment and Kaleden Holdings.

“It is rare to find a small company that has remained cash positive in this industry,” Gurinder Singh, the managing director at Kaleden Holdings commented in regards to the investment.

The exact amount raised was not disclosed, but it was reportedly said to be in the range of Rs 20 crore to Rs 34 crore (about US$3 to US$5 million).

These latest proceedings will be used for talent acquisition, developing new products as well as the geographical expansion across India. Additionally, part of the New Delhi startup funding will also be used for brand-building and marketing.

Launched in 2012 by Sankalp Shangari, Shailendra Agarwal, and Mohammad Rehan, instantPay is a business unit of SMSdaak India Limited, which provides more than 100 products and services which facilitate digital payments at Kirana stores in tier-2 and 3 cities.

The products and services are distributed through over 400 corporate strategic alliances and through a nationwide network of micro-merchants, offering services which include electronic mobile recharges, DTH and utility bill payments, insurance premium payments, travel bookings, domestic remittance etc.

Additionally, their financial institutions and merchants can also provide a host of supplementary services to their consumers, thus up-selling and cross-selling their existing portfolios. The platform currently has over 62,000 merchants and targets to cross 120,000 merchants by March 2017.

“While we build this massive network, we are also enabling other products and services to be delivered via this distribution directly and efficiently,” said Sankalp Shangari, the cofounder of instantPay.

At the moment, instantPay claims to be processing around 10 million transactions per month and is looking to touch the 50 million mark by FY18.

Besides, the company has also been profitable, having closed FY16 “net positive in a few lakh”. For FY17, the startup is aiming at a 20% leap in growth with a four-fold jump in revenue for FY18.

“Companies should target to make unit economics sustainable before taking long bets in the market and aggressively aiming for market share,” said Rajesh Bothra, the Managing Director at RB investments.

The investors also add that the key challenge for companies in this space in the upcoming year would be to mitigate cyber security risks following a surge in business due to demonetisation.

At present, the company’s network comprises of more than 50,000 outlets across districts in India, for leading telcos and direct to home service providers.

By Vivian Foo, Unicorn Media