Alibaba spin-off Alipay made a big investment in a Singapore startup, and no one noticed

2016-07-22
When we went around asking people in tech if they know about M-Daq, all we got were puzzled looks. Turns out it’s probably the most underrated startup in Singapore.

But the fintech company is no fly-by-night operation. One of its investors is Ant Financial, the Alibaba affiliate that runs its payment gateway Alipay, according to a document reviewed by Tech in Asia.

Alibaba has been making big moves in Southeast Asia recently.

Ant Financial was most likely part of M-Daq’s huge US$87 million series C round, which flew under the radar in November. This made M-Daq one of Singapore’s top-funded startups.

The issued share capital that Ant Financial owns in M-Daq is worth US$22 million, with the value of its total shares being higher.
According to an infographic on M-Daq’s website, the round was raised at a valuation of US$185 million. It was led by what’s described as “a new strategic investor,” with existing investor EDBI participating. This strategic investor seems to be Ant Financial.
M-Daq would not comment for this story. Ant Financial did not reply Tech in Asia’s questions either.

Why M-Daq matters to Alibaba

Alibaba has been making big moves in Southeast Asia recently. It bought a controlling stake in Lazada, and Ant Financial plans to buy a 20 percent stake in a Thai payments company. All this is part of Alibaba’s global expansion plan.

It’s in this context that Ant Financial’s involvement in M-Daq makes sense. In September, M-Daq debuted a forex product for ecommerce called Aladdin, which it piloted with a “global ecommerce powerhouse.” The technology purports to make cross-border transactions less costly and with more predictable rates for merchants.

If Alibaba wants to boost sales between sellers in China and buyers everywhere else, this will come in handy.

The document Tech in Asia obtained reveals that Ant Financial invested in M-Daq via an entity called API (Hong Kong) Investment Limited. According to financial results (PDF) by recent Alibaba acquisition AGTech, an entity called Shanghai Yunju Investment Limited holds 100 percent of shares in API. In turn, 100 percent of Shanghai Yunju’s shares are held by Ant Financial.