Japan’s SoftBank to buy 20pc stake in bKash
Japanese multinational conglomerate SoftBank Group Corporation is going to buy a 20 per cent stake in bKash, which could give a further push to the fast-expanding mobile financial service industry in Bangladesh.
BKash, the largest MFS operator in Bangladesh, said investment from SoftBank Vision Fund 2 is to promote financial inclusion by building a digital financial ecosystem.
The Fund will make both primary and secondary investments in the operator to buy the shares on a fully diluted basis.
The investment will provide support to bKash's existing platform, increase digital adoption and help users experience the best technology available in the world, said the MFS operator in a statement.
The investment by the renowned foreign firm was viewed positively by analysts and MFS operators as it shows the potential of the MFS industry, which recorded around Tk 2,100 crore transactions daily in July, up 115 per cent three years ago.
Brac Bank, which holds 51 per cent stake in bKash, said its board approved the execution of the share purchase and subscription agreement amongst bKash and its existing shareholders, including Money in Motion LLC, the International Finance Corporation, the Bill & Melinda Gates Foundation, Alipay Singapore E-Commerce Private Ltd, and the bKash Employee Share Option Plan Trust, and the proposed investor SoftBank.
Brac Bank shares rose 9.93 per cent to Tk 48.7 on the Dhaka Stock Exchange yesterday.
"This latest investment round validates our dedication and relentless efforts over the last 10 years and places its trust on the potential of a well-regulated fintech space," said Kamal Quadir, founder and CEO of bKash.
"It is a significant vote of confidence on the current and future growth trajectory of bKash. It also paves the way to attract global investment for other entrepreneurs and innovators of Bangladesh by showcasing the successful digital transformation of our country and its economy."
Launched in 2011 by Brac Bank and Money in Motion, bKash gained popularity within a short time. Fifteen MFS providers are operating in the country.
In the statement, Greg Moon, managing partner at SoftBank Investment Advisers, said broadening access to financial services could be critical to building a robust economy.
"We believe that bKash is strengthening Bangladesh's financial system by providing a safe and convenient way for people to adopt digital payments."
"We are excited to partner with Kamal Quadir and the bKash team to help support the company's vision to achieve greater financial inclusion in Bangladesh through affordable, reliable and accessible services."
SoftBank is engaged in a variety of businesses in the telecommunications and information technology industry. Its Vision Fund has an investment in Arm Holdings, Sprint Corporation, Alibaba, Yahoo Japan, Ola Cabs, HYKE, Paytm, and WeWork.
"SoftBank is one the prestigious investment banks in the world, so it's a good initiative for the country," said Arif Khan, vice-chairman of Shanta Asset Management.
"It has an investment in many renowned companies in the world. So it is a positive development."
SoftBank's total investment fund is bigger, Khan said. "So, it will portray a positive image of Bangladesh in terms of an investment destination."
Shahidul Islam, CEO of VIPB Asset Management Company, said as the Japanese investment bank was the world's top technology investor, the investment was very positive for Bangladesh.
"It shows that renowned companies are optimistic about us. It will create a positive impression among other foreign investors."
SoftBank logged profits of $4.94 billion for the financial year ended on March 31, 2021, according to its financial statement.
However, SoftBank Group Corp slumped to a quarterly loss on Monday, as its Vision Fund unit took a $10 billion hit from a decline in the share price of its portfolio companies and as China's regulatory crackdown on tech firms weighed, reported Reuters.
With 5.6 crore registered customers, bKash's net loss rose to Tk 81.4 crore in 2020 from Tk 62.5 crore in 2019.