Novatti buys key Southeast Asian fintech to expand foothold in region
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Novatti is continuing its expansion across Southeast Asia, acquiring a key payments fintech which will boost both revenue and customer growth opportunities.
Multi-channel payments company Novatti (ASX:NOV) has acquired Southeast Asian fintech ATX in a deal worth up to $9.9 million payable in cash and Novatti fully paid ordinary shares.
Based in Malaysia, ATX provides traditional retail stores and kiosks with digital payment services, such as third-party bill and product payments, and is considered a pivotal acquisition for Novatti.
Founded in 2011, ATX has been recognised as a top 50 rising start-up in Southeast Asia with a large established payments network, including more than 30,000 touch points across Malaysia.
Novatti has been a partner of ATX since 2015, which has resulted in a strong understanding of the business and reducing risk associated with the acquisition.
In FY21, ATX generated normalised annual revenue of $3.0m and EBITDA of $0.6m, which would have represented an additional 18% annual sales revenue for Novatti for the financial year increasing from $16.5m to $19.5m.
ATX has established numerous strong business and consumer facing brands, including B2B payments aggregator PayHub, B2C digital wallet GoPay, B2B2C platform MyPOSPay and B2B2C online marketplace for grocers RuncitHero.
As a partner ATX has largely focused on leveraging Novatti’s technology. The acquisition will enable Novatti to use its ecosystem and resources to scale the existing ATX business in Malaysia.
Novatti will also be in the position to introduce its additional services, such as billing, along with the potential to further provide other value-added products into ATX’s customer base.
Novatti will now have access to ATX’s existing innovative solutions and technology, including its e-wallets.
As part of the deal, ATX’s strong leadership team, including its founders who hold the positions of CEO and director (strategy) will remain employed post acquisition, ensuring continuity.
The ATX acquisition will provide an on-the-ground presence for Novatti as it expands across its key targeted market of southeast Asia.
Novatti recently announced its partnership with global blockchain and crypto solution provider Ripple has expanded into Thailand where it’s already generating revenue.
Novatti MD Peter Cook said the company had enjoyed working with ATX as a partner and sees high value in the innovative solutions ATX has developed for digital payments.
“The acquisition of ATX will not only provide Novatti with a strong business in Malaysia, but also provides a platform to continue our expansion in Southeast Asia, where we see increasing growth in digital payments,” he said.
“This growing demand has already supported a number of Novatti’s other recent activities in the region, including the expansion of our partnership with Ripple into Thailand, after launching in the Philippines earlier this year.”
ATX founder and CEO K. Sashi Kumar said the acquisition would benefit both companies.
“We are thrilled to be joining the Novatti team. Having worked together for several years, we know the strength of Novatti’s solutions and believe we can add value,” he said.
“We are particularly excited by the prospect of working together to expand in Malaysia and Southeast Asia and look forward to this exciting new chapter”
It’s not just Southeast Asia Novatti has been focused on this year, having launched its new brand Verv to service clients in Europe, and Emersion in the US.
Novatti recently closed the Series A funding round for its new banking business, with $10.5 million committed.
The fintech also delivered record total annual revenue of $18.4m for FY21, an increase of 55% on FY20, and completed a $40m plus capital raising to expand its growth strategy.
At the time of writing Novatti shares were up 3.45% to 45 cents.
This article was developed in collaboration with Novatti, 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.