Axiata, a Malaysian telecommunications conglomerate, is reportedly planning to raise capital for its fintech unit, Axiata Digital’s financial services arm, in a funding round aimed at expanding its holdings.
According to sources close to the matter, the company is currently in discussions with potential investors to secure additional funding for the fintech arm, which operates Boost, one of Malaysia’s leading mobile wallets, as well as several other digital financial services.
The fundraising initiative comes as Axiata Digital seeks to strengthen its position in the Southeast Asian fintech market, which is expected to grow rapidly in the coming years. Axiata Digital’s CEO, Mohd Khairil Abdullah, has previously stated that the company aims to become the region’s leading digital financial services provider.
Axiata’s decision to focus on fintech is in line with the growing trend of traditional telecommunications companies branching out into the digital finance space to tap into new revenue streams and stay relevant in the face of changing consumer habits.
Boost, which was launched in 2017, has quickly gained popularity in Malaysia, with over 8 million registered users and a network of over 170,000 merchants. The platform offers a range of services, including mobile payments, bill payments, and peer-to-peer transfers.
Axiata Digital has also expanded its financial services offerings beyond Boost, with products such as Aspirasi, a micro-financing platform for small businesses, and ada, an artificial intelligence-powered digital financial assistant.
The fintech arm has already received significant investment from Axiata, with the parent company reportedly injecting over RM1 billion (USD 240 million) into Axiata Digital in 2020 to support its growth and expansion.
While the details of the funding round have not been disclosed, sources suggest that the company is targeting a valuation of over RM3 billion (USD 720 million) for Axiata Digital’s financial services arm.
Axiata’s move to raise capital for its fintech unit is reflective of the current trend in the Southeast Asian market, where several other digital finance firms, including Grab, Gojek, and Sea Group, have raised significant amounts of funding in recent years to expand their offerings and gain a foothold in the fast-growing industry.
The increased competition in the sector has also led to a push for consolidation, with several mergers and acquisitions taking place in recent years. For example, in 2020, ride-hailing giant Grab acquired Indonesian digital payments platform Ovo in a deal reportedly worth over USD 1 billion.
In conclusion, Axiata Digital’s plans to raise capital for its fintech arm highlight the growing importance of digital finance in Southeast Asia and the desire of traditional telecommunications companies to tap into this burgeoning market. With the funding round expected to fuel the expansion of Axiata Digital’s holdings, the company aims to solidify its position as a leading player in the region’s fintech industry.
