China’s Ant Financial Services Group, which operates Alibaba-linked payment platform Alipay, will buy 20 percent of bKash, Bangladesh’s largest mobile money company.
The value of the deal was not disclosed by any party, but a source familiar with negotiations of the agreement confirmed that the company was valued at $640 million.
Alipay Singapore E-commerce Private Ltd will purchase 20 percent of bKash on a fully diluted basis in the landmark deal.
Alipay will buy 10 percent from bKash’s existing shareholders, such as Money in Motion, International Finance Corporation and Bill & Melinda Gates Foundation. Alipay will buy another 10 percent over a period of time upon the completion of the deal.
“I feel this kind of investment will make a real impact on the economy as it demonstrates growing confidence and business opportunities in Bangladesh,” Kamal Quadir, chief executive officer of bKash, told bdnews24.com after signing the deal in Dhaka on Thursday.
“It’s a win-win situation for both investors and Bangladesh,” said Quadir, the founder of bKash.
Along with its investment, Alipay brings the best payment technologies built by thousands of engineers and the knowledge of applying those technologies to economies like China which went through a massive transformation in recent years, he said.
“Such track record makes Ant Financial a fitting partner for bKash since Bangladesh too has a large population of 160 million and an economy that is advancing rapidly. This investment opens many new opportunities for bKash and demonstrates the confidence a world-class player is placing in Bangladesh,” said Quadir.
The deal between Ant Financial and bKash focused on strategic partnership, aiming to promote financial inclusion for the unbanked and under-banked communities in Bangladesh, bKash said in a statement.
Both Ant Financial and bKash pledged to bring “highly secure and inclusive financial services to address the needs of local people and small businesses”.
“Ant Financial and bKash share similar goals, in that we want to bring equal opportunities to everyone here in Bangladesh. bKash can tap the experience Alipay has built over the last decade serving 800 million users together with our strategic partners worldwide,” said Eric Jing, executive chairman and CEO of Ant Financial.
Launched in 2004, Alipay and its strategic partners in overseas markets currently have over 800 million users. In China, over 40 million brick-and-mortar merchants now accept Alipay. Overseas, Alipay now covers 40 countries and regions to provide more diversified services for Chinese travelling overseas.
“As part of Ant Financial’s global strategy, we are keen to share our technology know-how with partners like bKash, who has successfully brought financial services to the largely unbanked population in Bangladesh,” Jing said.
Brac founder Sir Fazle Hasan Abed, Professor Iqbal Quadir of MIT and other dignitaries were present at the event. Iqbal Quadir, who famously put the Grameenphone deal together in the 1990s, was also involved with bKash. Khaled Shams, a former chairman of Grameenphone and a former deputy MD of Grameen Bank who led the massive expansion of the micro lender, was also present.