Ant Financial, a fintech affiliate of Chinese e-commerce giant Alibaba, has acquired a significant stake in Vietnamese digital payment firm eMonkey in a deal negotiated during the summer, Reuters reported on Thursday.
Why it matters: The Chinese fintech unicorn is strengthening efforts to capture more global opportunities.
- Earlier this week, the company announced several leadership changes, including naming Simon Hu as the company’s new chief executive, replacing Eric Jing.
- Jing, who currently serves as the executive chairman of the company, said in the announcement that he needed to focus more of his time to the company’s “future market potential” and “globalization strategy.”
Details: Ant Financial will not have majority control over eMonkey but is still expected to have significant influence and provide technical expertise to the e-wallet, according to Reuters.
- The deal, negotiated over the summer, is reportedly not being announced publicly in Vietnam because it could lead to pushback. Anti-China sentiment has been brewing in Vietnam since last year, sparked by fears that new government policies would allow Chinese investors to dominate special economic zones.
- Ant Financial’s investment is said to be a savvy move because eMonkey has already obtained all of its operating licenses from the State Bank of Vietnam.
- Vietnam presents significant growth opportunities with a market of nearly 100 million potential users, a quarter of which are under 25, according to the report.
- An Ant Financial spokesman declined to comment on “market rumors” on Friday.
- The sources declined to provide details about the size of the deal.
Context: Ant Financial is the dominant mobile payment provider in China and has been seeking expansion into other emerging markets, specifically those in Southeast Asia.
- The company has set up a $1 billion new fund to invest in startups in the region.
- Ant Financial’s mobile payment app Alipay held a little over half of the Chinese market in the third quarter, according to Chinese research firm Analysys.