TrueLayer to use funds for expansion
Tencent (TCEHY) and Singapore government-owned fund Temasek recently made an investment of $35 million in London-based financial technology startup TrueLayer, according to a report from Bloomberg. TrueLayer, founded in 2016, provides a platform for building financial apps that can work with different banks. TrueLayer currently operates in Britain, Germany, France, Italy, and Spain. It is expected to use the latest funding from Tencent and Temasek to expand into more markets across Europe and Asia.
The investment in TrueLayer is an attempt by Tencent to broaden its participation in the world of financial technology. Tencent runs a mobile payment service known as WeChat Pay, which is one of the top mobile payment platforms in China. WeChat Pay is mostly focused on serving the consumer market. A stake in TrueLayer could help Tencent go beyond the consumer financial services market. TrueLayer works with banks and financial services providers, helping them create what can be described as boundless financial apps that can work across banks and platforms.
Tencent-Alibaba rivalry continues
In the context of Tencent’s rivalry with Alibaba (BABA), the investment in TrueLayer marks a continuation of the tit-for-tat moves between the two Chinese technology giants. Early this year, Alibaba’s financial services affiliate, Ant Financial, bought London-based international money transfer and currency exchange firm WorldFirst. Ant Financial made the purchase about a year after American authorities blocked it from acquiring international money remittance company MoneyGram (MGI).
Tencent made a profit of $4.1 billion in the first quarter, compared to a profit of $3.8 billion a year earlier. Tech-based financial service companies PayPal (PYPL) and Square (SQ) posted $667 million in profit and $38 million in loss, respectively, in the first quarter of 2019.