M-DAQ, a Singapore-based fintech company, said Tuesday it has entered into a definitive agreement to acquire Wallex, a business to business (B2B) cross-border payments provider with licenses in Hong Kong, Indonesia, and Singapore.
The acquisition is the first of a series for M-DAQ, as it embarks on a global growth plan to capture market opportunities and expand its downstream reach in the value chain, M-DAQ said in a statement.
In addition to the amount paid for the full acquisition, M-DAQ will also be injecting fresh working capital to accelerate the Wallex business. The combined entity is expected to process in the excess of S$15 billion ($11 billion) of Gross Transaction Value (GTV) this year.
Wallex will continue as an independently operated business and brand, with Hiro Kiga, Co-Founder and Chief Operating Officer, appointed as the new Chief Executive Officer.
According to the statement, the acquisition provides synergy to both. Through Wallex, M-DAQ clients can utilise versatile electronic tools for funds transfers through its existing currency corridors, further improving reporting accuracy and regulatory reporting requirements. Wallex customers can enhance their foreign exchange (FX) experience through the M-DAQ proprietary solution, Aladdin, that can provide guaranteed FX rates and achieve more competitive pricing through the aggregation and algorithmic capabilities that M-DAQ offers.
“Investing in businesses with strong growth potential is one of our core strategies, as we expand our ecosystem. We are excited to welcome Wallex into the M-DAQ Group to strengthen our footprint in the payments space by reaching a wider range of small and medium sized enterprises (SMEs) and their customers as we look to provide additional value and cost reductions to their businesses. Both organisations will continue with their aggressive hiring to scale further,” said Richard Koh, Founder and Group Chief Executive Officer of M-DAQ,
“M-DAQ is also investing in building an ecosystem that complements the core FX business. In this instance, M-DAQ will be the upstream FX provider to supply Wallex with the necessary liquidity it needs to run its core payments business. This business to business to consumer (B2B2b2C) business model is an ecosystem of businesses that complements each other, reduces duplication, increases efficiency, and ultimately reduces transaction costs for the end clients, as economies of scale are materialised,” he added.
Meanwhile, Wallex’s Co-Founder and Chief Executive Officer Hiro Kiga said :“At Wallex, we have always strived to deliver the most cost-efficient, fast, and secure payment solutions for global businesses. The combination of Wallex’s network and M-DAQ’s fintech expertise will enable us to deliver greater value to empower businesses across borders. We look forward to achieving our goals together, by creating new opportunities that leverage the strengths of each platform.”
Founded by Jody Ong and Hiro Kiga in 2016, Wallex facilitates B2B cross-border payments for businesses in Indonesia, Greater China, and Singapore by offering seamless, up-to-speed transactions with competitive exchange rates and fees into more than 180 countries. Businesses can benefit from advanced multi-currency solutions to collect payments via virtual accounts and hold funds in a digital wallet.
With customisable application programming interface (APIs), Wallex also supports leading FinTechs in Asia to innovate and scale their businesses by leveraging Wallex’s infrastructure to build cross-border offerings tailored to their customer needs.
Despite the challenges with Covid-19, Wallex registered 5.5 times growth in its annualized revenue over the past year. The Wallex platform supports nearly 2,000 banking and technology clients, processing almost S$4 billion ($2.97 billion) in GTV annually.
M-DAQ empowers businesses in various industries to facilitate cross-border transactions with its best- in-class FX solutions. The home-grown, Singapore-based company has embarked on a global growth plan to capture market opportunities and to create a new fintech ecosystem, focused on providing specialized technology-enabled financial services to enterprise customers and other downstream FinTechs.
Founded in 2010, with a vision to create a world without currency borders, the company achieved net profitability in 2018. Asian private equity firm Affinity Equity Partners invested S$200 million ($148.41 million) in M-DAQ’s Series D round. Other international strategic and financial investors have included Ant Group, EDBI, NTT Communications, Samsung, and Kiwoom.
Since 2016, M-DAQ’s Aladdin FX solution has processed nearly S$30 billion ($22.26 billion) in cross-border transactions covering 45 markets globally and supported by two-thirds of the world’s foreign exchange liquidity, enabling eCommerce ecosystems such as AliExpress, Tmall, and JD.com.