M-DAQ has agreed to buy out e-wallet company Wallex to expand its footprint in South East Asia. Jack Ma’s Ant Group Co. backs the Fintech start-up, and the move is towards a possible IPO listing in the future.
More about the acquisition
The deal is the first among a series of potential acquisitions in the payment space in Southeast Asia by M-DAQ. Jeremy Sng, who was the earlier heading CLSA, a Southeast Asia investment banking and now the General manager with the Singapore based fintech company since December, said that M-DAQ would infuse working capital funds to the tune of $5.2 million (S$7 million) in Wallex but declined to comment on the total deal value.
As per Sng, M-DAQ plans to acquire about two companies annually over the next couple of years before launching an IPO and listing on U.S., U.K., or M-DAQ plans. Sng, who heads the corporate finance and strategy division of M-DAQ, said that the potential target acquisition would be those companies with a business value ranging from $50 million and $250 million.
As per Bloomberg News, the acquisition will enable M-DAQ to get hold of Wallex’s thousands of customers, primarily small vendors and businesses on the e-commerce platform. This will help them to diversify the revenue stream. According to Sng, M-DAQ two-thirds of revenue comes from Jack Ma’s Ant.
Wallex operates an e-wallet that allows merchants to receive, convert and store money in multiple currencies. The deal will enable the combined entity to process over $15 billion worth of transactions online annually if approved by the regulatory authorities. After the acquisition, Wallet will continue to operate its brand and business independently, as per Sng.
The M-DAQ’s technology will allow the company to guarantee the foreign exchange rates of different currencies in advance based on the customer’s profile and historical data. This will help the clients of M-DAQ, such as AliExpress of Alibaba Group Holding Ltd and JD.com Inc., to display the price of goods in local currencies to their customers. Merchants also have the option to receive the payments in their preferred currency. Last year, Affinity Equity Partners invested $200 million in M-DAQ.
M-DAQ is expanding its Southeast Asia as eCommerce is gaining ground in this region. The internet economy of Southeast Asia is projected to double to $363 billion by 2025, according to research from Google, Bain & Co, and Temasek Holdings Pte.
