Southeast Asian payments platform 2C2P is setting aside about $15 million or 30 per cent of its last $52 million fundraise to make strategic investments in the fintech space, said its group CEO and founder Aung Kyaw Moe.
The capital will go into a separate investment arm called 2C2P.VC, which will be a fully-owned entity headquartered in Singapore, and led by Eva Weber who recently joined the company as investment director.
Aung explained that 2C2P.VC was created as an independent vehicle to facilitate speedier and more efficient investment decisions. It also gives the management team greater autonomy to execute. He clarified that 2C2P.VC is a subsidiary and not a licensed fund.
2C2P.VC is looking to take minority stakes in fintech startups in the Series A to B stage, preferably with some record of generated revenue. These firms may be in sub-sectors including new payment options or system integrators with links to banks or large enterprises. It is also eyeing fintech startups that offer 2C2P an entry into new markets such as the Middle East.
2C2P group CEO and founder Aung Kyaw Moe said: “There are a number of companies where we see a strong strategic fit – either due to exciting new technologies, complementary products or geographic presence in markets where we want to be in the future.”
“Above all, we look for teams who want to join our growth journey. With our latest funding round in 2019, we are now in a position to invest in such companies and partner with them even more closely going forward,” he added in a statement.
2C2P’s ability to set aside such a hefty amount of cash makes it an anomaly when compared to many venture-backed startups in COVID-hit Southeast Asia.
Aung told DealStreetAsia that 2C2P has been EBITDA positive since 2018, suggesting that it didn’t really need the venture capital it’s raised since then to keep its day-to-day operations chugging. Since its 2003 inception, 2C2P has raised $70 million across a total of 5 rounds, with its most recent one comprising a $53 million round backed by the International Finance Corporation (IFC), Cento Ventures and Arbor Ventures.
2C2P declined to share its revenue or profit figures but noted that its overall Gross Merchandise Value (GMV) numbers have dipped by 10-20 per cent as a result of the COVID-19 outbreak. While its exposure to airlines, travel and retail will drag its performance, the firm is hopeful that rising demand in other areas such as insurance, online gaming and mobile top-ups will offset the impact to an extent.
2C2P aims to be the preferred payments platform for ASEAN, helping businesses accept payments from customers across across online, mobile and in-store channels. It competes with global players such as WorldPay and Stripe, as well as several other regional and local payment providers. The company operates globally across Southeast Asia, North Asia, Europe and the US.