Wave Money will issue fresh shares to Ant Financial as part of the agreement, the companies said in a joint statement Monday.
Wave Money, a joint venture between telecom firm Telenor Group and local conglomerate Yoma Group, seeks to use Ant Financial’s expertise in mobile payment and digital financial services to boost its technological capabilities and promote financial inclusion.
Wave Money operates a network of more than 57,000 agents in urban and rural areas across 295 out of 330 townships nationwide, covering around 89 per cent of the Burmese population.
The company said its transfer volume more than tripled year-on-year in 2019, reaching 6.4 trillion kyats ($4.3 billion). Founded in 2016, Wave Money turned EBITDA positive in September 2018.
In October 2018, the startup launched its e-payment service, Wave Pay, and claims to have witnessed a 14 per cent month-on-month increase in terms of monthly active users.
In total, Wave Money boasts more than 21 million users on its platform.
“Myanmar is ready for mass adoption of digital payments with a connected population and high smartphone penetration. This partnership will be transformative for Wave Money and Myanmar,” said Brad Jones, CEO of Wave Money.
With their partnership, Wave Money and Ant Financial seek to cater to small and medium businesses in Myanmar, according to Eric Jing, executive chairman of Ant Financial.
Melvyn Pun, CEO of Yoma Strategic Holdings, added: “Myanmar’s population is still massively underserved by formal banking institutions with only a quarter of people having a bank account. The COVID-19 situation is accelerating the trend towards a cashless society and drives the growth of ecommerce, and we expect this strategic partnership to massively boost Wave Money’s capabilities to support these trends.”
Yoma Strategic Holdings, a unit under Yoma Group, said it will also consider increasing its shareholding in Wave Money. In November last year, the investor sealed a deal to purchase another 10 per cent interest in Wave Money from First Myanmar Investment for $6 million.
That transaction boosted Yoma Strategic’s stake in Wave Money to 44 per cent. Telenor remained the largest shareholder with a 51 per cent stake, while Yoma Bank held the remaining 5 per cent.
According to local media reports, only a small number of Myanmar companies were able to get loans from the government’s support fund for businesses affected by the COVID-19 pandemic. Most of the financing went to businesses based in Yangon.
The Myanmar government has said it plans to increase financial inclusion in the country from the current 48 per cent to 60 per cent by 2022.