SME digital financing platform Funding Societies has announced its acquisition of Singapore-based regional payments solution CardUp for an undisclosed amount. The move will see the company acquire CardUp's payments capabilities such as card payments to non-card accepting recipients (domestic and cross-border), online payments acceptance, invoice automation tools.
It will also include its licenses and integrations with renowned third-party business software.
Co-founder and Group CEO of Funding Societies Kelvin Teo, commented on the occasion stating, "Having known Nicki and CardUp since 2018, we find CardUp has a great cultural and strategic fit.”
“Acquiring CardUp enables us to leapfrog and accelerate our market leadership in the regional FinTech space, integrating payments capabilities, enhanced user experience and local licenses to our digital lending experience across key markets.”
The acquisition comes at the right juncture as SMEs are expected to push ASEAN's digital finance market to US$60 billion by 2025, while the region's business payments sector grows at a CAGR of 10% over the next five years.
The transaction supports the current drive of ASEAN SMEs to digitally transform their financial processes, to save time and money, and to better serve their customers via next-generation financial tools and services.
Since 2016, CardUp helps individuals and businesses to make payments to suppliers and collect payments from customers digitally with a presence in Singapore, Malaysia, and Hong Kong. The solution has served tens of thousands of businesses including micro businesses, SMEs, and corporates across a spectrum of B2B and C2B industries.
These businesses use CardUp for payments related to payroll, rent, corporate tax, vendor payments, receivables flows, and cross-border expenses. CardUp sees huge demand from businesses looking to save time and money through payment digitisation, which is reflected in its rapid growth, increasing 53% QoQ.
"This acquisition reflects strong strategic and cultural synergy with both parties aligned on the mission to help SMEs improve the way they operate their business and manage cash flow,” said Founder and CEO of CardUp, Nicki Ramsay. “We are confident that CardUp and our employees are in good hands with Kelvin and his team and are excited to work together on this next chapter of growth."
The acquisition comes off the back of Funding Societies' recent Series C+ raise of US$294 million in February 2022, of which US$144 million was raised in equity, and its recent investment into Bank Index in Indonesia, launch of business virtual card Elevate in Singapore and entry into Vietnam, strengthening the company's suite of financial services for SMEs.
Once the acquisition is finalised and approved by the regulators, Funding Societies will welcome Nicki Ramsay into its management team to lead its payments business while retaining all CardUp's employees across Asia.
“We are excited to work with the CardUp team and are honoured to join forces with them," concluded Kelvin.
CardUp will continue to operate its consumer and business services and maintain its long-standing relationships with card networks, issuers, and media partners. Funding Societies and CardUp will tap into strong synergies in the form of complementary talent, technologies, as well as bank and technology partnerships to further empower SMEs in Southeast Asia.