Singapore-listed Yoma Strategic Holdings will acquire Telenor Group’s 51 per cent stake in Myanmar’s mobile financial services provider Wave Money for $76.5 million, it said in an announcement on Wednesday.
Yoma Strategic will set up a new holding company, Yoma MFS Holdings, to acquire the additional stake in Wave Money. Upon completion of the transaction, it plans to invest up to $25 million in the fintech company.
Wave Money runs a network of more than 58,000 agents in urban and rural areas across the country. Users can transfer money through their mobile phone or any of the Wave agents. The company claims to have tripled transfer volume year-on-year to 6.4 trillion kyat ($4.3 billion) in 2019.
The proposed acquisition will allow Yoma Strategic to strengthen its interest in Myanmar’s financial services sector, it said.
The development comes on the back of a $73.5 million investment by Ant Financial in Wave Money in May this year for a significant minority stake.
“This is an opportune time for Telenor Group to divest. Both Yoma Group and Ant Group’s core operation is financial services and technology and they are, therefore, the strongest owners to take Wave Money forward,” said Lars Erik Tellmann, Head of Financial Services at Telenor Group.
The new holding company will raise capital from a consortium of investors led by Yoma Strategic to buy the stake from Telenor, according to a statement.
In March 2018, Yoma Strategic acquired a 34 per cent stake in Wave Money at a valuation of $57 million. In November last year, it announced it was picking up an additional 10 per cent stake in the company at a valuation of $78 million.
“This acquisition is part of our goal to build a strong financial technology ecosystem in Myanmar. Wave Money continues to see sustained growth in its agent and digital platforms, with Wave Pay gaining strong traction during the COVID-19 pandemic through the acceleration in and adoption of cashless payment solutions,” said Yoma Strategic CEO Melvyn Pun.
Wave Money is expected to become a subsidiary of Yoma Strategic following the completion of the proposed acquisition of Telenor’s interest subject to certain conditions, including regulatory approval.
WaveHold Co will hold 51 per cent in Wave Money while Yoma Strategic and Yoma Bank will own 44 per cent and 5 per cent, respectively. This shareholding structure is pre-Ant Financial’s investment.
“Over the last three years, Wave Money has built a strong team with its own capabilities to provide financial services bringing financial inclusion for the people of Myanmar,” said Wave Money CEO Brad Jones.
Of Myanmar’s 53 million residents, 80 per cent remain unserved by the banking system.
In a recent interview with us, Jones said that Wave Money aims to leverage its investors’ experience in building mobile payment platforms to enhance its digital competence, capabilities, user experience and service offerings in Myanmar.
Wave Money also plans to re-launch its mobile wallet in a few months with newly added features and better user experience and expand to other countries like Thailand, Vietnam and Singapore by offering cross-border transactions where regulations allow.
Edited excerpts of a recent interview with Wave Money CEO Brad Jones:-