Technology venture capital firm Fatfish Group (ASX: FFG) has acquired a key lending licence in Malaysia ahead of its planned rollout of buy now, pay later (BNPL) services in South East Asia.
In today’s announcement, Fatfish revealed it has entered into a binding agreement to acquire an 85% stake in Malaysia-incorporated Forever Pay Sdn Bhd for a total purchase consideration of $870,000.
It called the acquisition a “progressive step” in its strategy to rollout its BNPL business across South East Asia and follows Fatfish’s bolstered acquisition of Singapore-based Smartfunding earlier this year.
“Acquiring Forever Pay will allow Fatfish Group to utilise Forever Pay’s lending licence to enter the retail BNPL business and further positions Fatfish as a comprehensive BNPL player in South East Asia,” the company stated.
Deal to be paid in cash and shares
The $870,000 deal comprises a cash payment of $450,000 to be paid over a 12-month period plus 3 million Fatfish ordinary shares at an issue price of $0.14 per share to the value of $420,000.
Fatfish said the transaction will be funded by working capital of the company.
Forever Pay has been incorporated since September 2020 and was awarded a money lending licence by the Ministry of Housing and Local Government of Malaysia, which allows financing business for consumers and corporates to be conducted including retail BNPL services.
Collaborations and synergies with Smartfunding
Via Forever Pay, Fatfish plans to launch a retail BNPL service to finance consumers’ purchase of products and services, as well as offer other digital financing solutions including short-term lending.
Fatfish is expected to enhance Forever Pay’s operational ability through its technology and domain expertise, especially in the areas of e-KYC technology, credit assessment and digital marketing.
The company also sees potential synergies and opportunities for Forever Pay to collaborate with its Singaporean subsidiary Smartfunding.
Fatfish said it intends to continue scaling up its BNPL and related fintech business, with demand for BNPL services expected to grow 400% to US$252 billion (A$330 billion) by 2025 according to a recent report.