AirAsia bolsters non-aviation business with $53.3m Big Pay investment

Photo: Company website

Malaysia’s AirAsia Group, which runs the eponymous budget carrier, has injected $53.27 million in its financial services unit Big Pay Pte Ltd through its wholly-owned subsidiary AsiaAsia Digital Sdn Bhd.

According to a regulatory filing with Singapore’s Acra, reviewed by DealStreetAsia, the investment, through the allotment of ordinary shares, was made on May 14.

DealStreetAsia reached out to AirAsia and Big Pay for comments but had not received any response till the time of publication.

The COVID-19 pandemic has prompted AirAsia to focus on its non-aviation verticals as the airline business remains mired in losses.

Last month, AirAsia, in a filing to Bursa Malaysia, revealed that it provided financial assistance to some of its subsidiaries and associates amounting to around 48.3 million ringgit ($11.7 million). Of this, $400,000 was provided in advances to Big Pay through AirAsia Digital on March 31.

The BigPay mobile money app, launched in 2018, is available in Malaysia and Singapore and provides payment and remittance services. The app comes with a physical international card similar to a Mastercard or Visa card.

BigPay garners revenue by charging fees including a 6 ringgit local ATM withdrawal fee and a 10 ringgit, or 2%, international ATM withdrawal fee. The company also charges a currency conversion fee of 1% in addition to network charges, aside from dynamic remittance fees. Cash top-up fee is 1 ringgit, plus 2% of the reload value, capped at 2 ringgit per transaction for reload amount up to 100 ringgit and 5 ringgit per transaction for reload above 100 ringgit.

Big Pay registered 4.6 million ringgit ($1.1 million) in revenue in the quarter ended March 31, lower than the 5 million ringgit recorded in the year-ago quarter. However, it was a 5% quarter-on-quarter increase primarily due to the increase in payments and remittance revenues, the company noted.

Late last year, Big Pay received a Community Credit Licence from Malaysia’s Ministry of Housing and Local Government, which allowed it to offer online loans or microcredit. The company has yet to start offering these services.

AirAsia’s digital strategy

The investment in Big Pay is part of AirAsia’s three-pronged digital strategy formulated last year to help offset some of the COVID-induced losses. The group reported a loss of 976.2 million ringgit in the first quarter of 2021, widening from 953.3 million ringgit in the year-ago quarter.

Meanwhile, its net loss for the financial year ended December 31, 2020, widened to 5.10 billion ringgit from 315.81 million ringgit in the preceding year.

The new digital strategy comprises focusing on a super app platform, which is being positioned as an all-in-one lifestyle and travel app; fintech play, through Big Pay; and investment in Teleport, its profit-making logistics arm.

In March this year, the group launched its food delivery service AirAsia Food in Malaysia and Singapore, in an effort to penetrate into a segment that saw unprecedented growth amid COVID-induced movement restrctions. It also conducted pilot tests for drone delivery in Malaysia.

AirAsia CEO Tony Fernandes has also mentioned plans to launch an air taxi service, aside from a ride-hailing service to compete with the likes of Grab. “I’ve got eight years of Grab doing it to learn from. I don’t have to waste all that money, with experimentation, building technology, training drivers, and training the market how to order… they have done all that for me,” he told local media The Edge Weekly in an interview in March.

The group also introduced airasia beauty recently. This e-commerce offering allows the app’s users to purchase skincare, makeup, and bath and body supplements, and get the products delivered at home.  

Meanwhile, the group has plans to list the logistics division as early as the second half of next year, its chief told DealStreetAsia in a recent interview. Ahead of the IPO, the company also plans to raise $50 million in a strategic round, Teleport CEO Pete Chareonwongsak said. Teleport provides air cargo, and door-to-door delivery, among other services.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.