Thai fintech unicorn Ascend Money is exploring partnerships and joint ventures in Vietnam as a way to secure a digital lending licence in the country, said a senior executive at the firm.
Ascend’s plans for market expansion follow a $150 million Series C funding round last week, which pegged the firm’s valuation at $1.5 billion and made it Thailand’s first fintech unicorn. It is not a typical startup though – Thai agribusiness-to-telecoms conglomerate Charoen Pokphand (CP) Group is a major shareholder of the firm.
Monsinee Nakapanant, co-president of Ascend Money, told DealStreetAsia that the firm is looking to expand its financial services offerings regionally, with Vietnam as its priority.
Ascend Money, whose flagship offering is its TrueMoney e-wallet, offers financial services including cross-border remittances, personal loans and digital wealth management. The firm operates in six Southeast Asian countries – Thailand, Myanmar, Cambodia, Indonesia, Vietnam and the Philippines – and holds e-money and remittance licences in most markets.
“We are definitely looking into Vietnam as the first market outside Thailand, but the model might be different. We are exploring the right lending model for this market,” said Nakapanant in a video call.
This may be in the form of an “industry-specific partnership” with a strong local partner, she explained.
“Our parent company CP Group already has a very strong presence in Vietnam in the agriculture sector. Our existing technology, credit scoring expertise and e-money licence also make us a strong potential strategic player there,” said Nakapanant.
Vietnam, she pointed out, offers far more flexibility to potential lenders such as Ascend than the firm’s home market. For instance, Vietnam has no interest rate limits, while rates are capped at 24% per annum in Thailand.
Ascend is unlikely to venture into peer-to-peer (P2P) lending, an area that Vietnamese regulators have previously clamped down on due to unruly behaviour by market players.
Leveraging partnerships and alliances
Ascend’s latest Series C round was backed by Bow Wave Capital Management and existing investors CP Group and Ant Group.
The fintech company hopes to leverage Bow Wave’s US network as it seeks to build its financial services offering beyond payments in Southeast Asia. “In the Thai market, we offer payments and fintech for SMEs. We felt that having a relationship with investment platform partners in the US can really help our business here,” said Nakapanant.
Around 95% of Ascend’s total purchase value (TPV) in 2020 comprised payment transactions alone. The firm is looking to diversify this further as it deepens its lending, cross-border remittances and other services.
“We’ve seen that Ascend e-wallet users who tap into digital lending are likely to spend twice more than those who use it only for pure payment purposes. So once the user taps on credit products, payment volume increases, which facilitates the growth in lending disbursement. So the products complement each other,” explained Nakapanant.
Ascend Money is one of Thailand’s most prominent fintech companies, claiming some 70% e-wallet market share. In 2020, the fintech unicorn recorded transactions with a total payment value (TPV) of $14 billion across Thailand and Southeast Asia.
Its TrueMoney e-wallet competes with ShopeePay, Dolfin (operated by Central Group and JD.com) and Rabbit LINE in Thailand.
Nakapanant attributed the firm’s strong TPV in its home market to its entrenched merchant network, which includes everything from local 7 Eleven and Burger King outlets to regional and international brands such as Google Play, Lazada, Foodpanda and Netflix.
Beyond Thailand, Ascend relies on its 88,000 strong agent network to acquire customers in highly underbanked areas where simple transactions like mobile top-ups, cross-border remits and payments can be conducted at local mom-and-pop stores. It is a strategy Nakapanant said Ascend will continue to utilise in its plans for regional expansion.