As reported by Forbes today, Alibaba has invested in online invoice exchange marketplace Qupital, marking the Chinese e-commerce giant’s first foray into fintech investment in Hong Kong. Qupital raised a total of $2 million in its seed round.
Accounts Receivable Marketplace
Qupital bills itself as Hong Kong’s first and largest online invoice discounting exchange. The company aims to solve the problem of companies not having quick access to cash by allowing them to raise funds on the site through the auctioning off of unpaid invoices, essentially securitizing their accounts receivable. Investors, or what the company calls “Funders”, can view and bid on invoices listed on Qupital by companies seeking to raise funds. Once the company receives payment from their debtors, Qupital automatically transfers the funds to the Funders along with interest. The company advertises itself as a secure trading platform that allows investors access to an asset class typically available only to large institutions.
Qupital was founded in 2016 by co-founders Andy Chan and Winston Wong. The $2 million seed round was led by Alibaba Entrepreneurs Fund and MindWorks Ventures with c0-investments from DRL Capital and Aria Group among others. The company plans to use funds from the round to enhance its technology platform and also to facilitate expansion in the region.
Another Sign of Asia’s Fintech Boom
Although this investment by Alibaba marks its first foray into fintech in Hong Kong, the company has been well engrossed in fintech previously. Mobile payments platform Ant Financial, a subsidiary of Alibaba, has been called the largest fintech company in the world. Recently, the company has made several other fintech investments in other parts of Asia, including investments in the Philippines and India, as well as a merger with Dallas-based money transfer company MoneyGram.
Fintech in Asia has seen an explosion of fintech investments lately, with companies in Hong Kong, Singapore, and Indonesia, in particular, raising increasing amounts of funds. Given Ant Financial announcing its commitment of $3 billion towards global expansion and the various sub-regions vying to become the premier fintech innovation hub of Asia, one can expect not only an increase of Alibaba’s interest in fintech in the region but also an increase in fintech investments in general.