Singapore-based fintech M-DAQ entered a deal to acquire business-to-business (B2B) cross-border payments player Wallex.
In addition to the acquisition consideration, M-DAQ will be injecting fresh working capital into Wallex, which is licensed in Hong Kong, Indonesia and Singapore, the companies said in a press release Tuesday. The acquisition consideration wasn’t disclosed.
Payments Growth
The combined entity is expected to process more than S$15 billion ($11 billion) in gross transaction value in 2022, the statement said, noting Wallex currently processes nearly S$4 billion annually.
M-DAQ’s Aladdin service has cleared around S$30 billion in cross-border transactions since 2016, the release said. The Aladdin service lets e-commerce customers pay in their home currency, while merchants receive payments in their preferred currency.
Heading for an IPO
M-DAQ plans the Wallex deal as the first in a series of acquisitions in a global growth plan to expand its downstream reach, the release said.
Bloomberg reported, citing Jeremy Sng, head of corporate finance and strategy at M-DAQ, that M-DAQ plans to acquire around two companies annual over the next couple years before targeting an initial public offering (IPO) in the U.S., London or Singapore. M-DAQ will target companies with enterprise valuations in the $50 million to $250 million range, the Bloomberg report said.
Wallex’s multi-currency services, which include customizable APIs, support nearly 2,000 banking and technology clients, the statement said. M-DAQ’s clients will be able to use those services for fund transfers, while M-DAQ’s product, Aladdin, will provide guaranteed foreign-exchange rates and more competitive pricing, the statement said.
Payments Footprint
Richard Koh, founder and group CEO of M-DAQ, said Wallex would strengthen his company’s payments footprint by reaching a wider range of small-to-medium-sized enterprises (SMEs) and their customers.
«M-DAQ will be the upstream FX provider to supply Wallex with the necessary liquidity it needs to run its core payments business. This B2B2b2c business model is an ecosystem of businesses that complements each other, reduces duplication, increases efficiency, and ultimately reduces transaction costs for the end clients, as economies of scale are materialised,» Koh said in the statement.
Ant Financial-Backed
Both M-DAQ and Wallex will continue to hire aggressively, he said.
Asian private equity firm Affinity Equity Partners invested S$200 million in M-DAQ’s series D round in August 2021.
In mid-2020, Ant Financial-backed BAce Capital, SMDV and Skystar Capital led a series A funding round in Wallex.
