Hong Kong startup close to US$500mil valuation

  • Business
  • Friday, 04 Aug 2017

HONG KONG: TNG FinTech Group Inc, a Hong Kong-based digital wallet operator founded in 2013, is poised to close a funding round and is targeting a valuation of about US$500mil, according to a person familiar with the matter.

It has attracted almost US$60mil in the series A round from investors including a Beijing-based private equity fund, said the person, who asked not to be named discussing private deliberations.

TNG, which offers global money transfers, foreign-exchange transactions and bill payments, expects to be profitable this year and is targeting a listing in either New York or Hong Kong by 2019, the person said.

Hong Kong, with an economy focused on property and finance, has struggled to create major startups and no companies from the city make the CB Insights list of unicorns, or firms with a US$1bil valuation.

WeLab, an operator of online lending platforms, reportedly came close to that mark in January after it completed a US$160mil funding round.

In April, Tink Labs Ltd, which leases phones to travellers, was in the process of raising about US$40mil and aiming for a unicorn valuation, people familiar with the matter said at the time.

TNG competes for digital payments in Hong Kong with Chinese internet giants Ant Financial and Tencent Holdings Ltd, and local operator Octopus Cards Ltd.

The Hong Kong Monetary Authority has granted so-called stored-value facilities licenses to 16 firms including the two Chinese companies since last year, helping fuel the popularity of digital payments in the city.

The number of stored-value facilities accounts in use rose 3.8% to 42 million at the end of the first quarter from December, HKMA data show. While the central bank didn’t provide a breakdown for the individual licensees, the figures include the ubiquitous Octopus cards that Hong Kongers use to pay for everything from bus and train rides to groceries and cappuccinos. The value of transactions in the March quarter was about HK$29bil (US$3.7bil), little changed from three months earlier.

TNG expects to close its latest fund-raising this week and the proceeds will be used to acquire companies with remittance licences in Singapore, Japan, the Philippines, Indonesia and the UK, the person said.

Besides the Beijing PE fund, other investors in the round include a Taiwan-based technology fund and an Israeli-Hong Kong PE venture, the person said, declining to name them.

The company, which is also targeting individuals in developing countries without access to banking services, has more than 600,000 users in Hong Kong, with 190,000 cash pick-up points in 13 countries, according to company figures.

After the latest funding round, founder and chief executive officer Alex Kong will hold a more than 80% stake in the firm. — Bloomberg

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