The fresh $8m in funds were obtained from Fatfish’s strategic long term partner and investor, Arena Investors, via convertible notes.
Tech venture Fatfish Group (ASX:FFG) is ready to ramp up its BNPL and fintech businesses in Southeast Asia, after announcing a fresh $8 million funding.
The funds were raised through US-based fund Arena Investors via convertible notes that convert at a fixed price of 7c per share, an 18% premium to yesterday’s closing price.
The fresh funds will be used to further expand FFG’s footprints in BNPL and other fintech businesses in Southeast Asia, a region which boasts a huge population and rapid growth rates for fintech adoption.
Strategic agreement with Arena
Today’s funding deal is part of FFG’s long term funding agreement with Arena.
The deal will see Arena providing $8 million in cash upfront, in return for convertible notes issued by FFG.
The notes have a 12-month maturity and pay a coupon rate of 1% per year.
They also give Arena Investors the optionality to convert them to FFG shares before maturity at 7c a share, at its own request.
CEO of FFG, Kin W. Lau said: “We have partnered with Arena Investors for three years now. They have been an incredibly supportive investor, working with the management of the company to grow our business.”
Lau also said Arena Investors has provided funding to FFG at key inflection points of the company, which includes buying FFG shares in the open market.
“In addition, Arena Investors has extensive experience in funding lending-related tech businesses globally. They are a long-term strategic investor that we value,” he added.
Arena Investors itself is an institutional asset manager founded in partnership with Canadian-listed The Westaim Corporation.
The company has around $2.2 billion of assets under management, and employs a team of over 80 people spread globally.
FFG’s BNPL and fintech footprints in Southeast Asia
Fatfish has been actively investing in a suite of BNPL and digital lending businesses across Southeast Asia.
Currently, its Southeast Asian investment portfolio consists of five rapidly growing businesses.
The portfolio includes Smartfunding, a Singapore-based fintech platform licensed by the Monetary Authority of Singapore, that has recently launched its BNPL offering to SMEs and corporates in Southeast Asia.
FFG increased its stake in Smartfunding from 78.7% to 89.4% in April.
Forever Pay is a Malaysia-based company that was awarded a lending licence by Malaysia’s Ministry of Housing and Local Government, giving FFG an immediate competitive advantage in the Malaysian market.
FFG has an 85% stake in Forever Pay.
FFG also owns Payslowslow, which will launch a consumer BNPL across the region. The business will work together with Forever Pay to comply with Malaysia’s regulatory requirements on BNPL services.
Payment gateway Pay Direct, a payments gateway with $380m in annual transactions, was acquired in April.
Pay Direct processes over $30m of transactions per month, and is certified to process payments through Visa, Mastercard, PayPal and FPX – the domestic network backed by Malaysia’s central bank.
Fatberry meanwhile, is FFG’s investment that operates a leading insurtech platform in Malaysia.
A direct-to-consumer online insurance marketplace, Fatberry provides pricing and product details for customers to compare online insurance products.
In just eight months since its launch in June 2020, the platform is already booking monthly revenues of $175,000 – equivalent to month-on-month growth of more than 100 per cent.
This article was developed in collaboration with Fatfish, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.