PETALING JAYA: Green Packet Bhd is acquiring Singapore-headquartered technology firm Xendity Pte Ltd which specialises in identity verification processes using e-KYC (electronic know your customer) technology for US$10 million (RM43 million).
KYC is an established concept in banking involving the mandatory process of identifying and verifying the identity of the client when opening an account and conducting other transactions. e-KYC uses technologies such as document verification, facial recognition and biometrics and typically only requires users to do so from their smartphones or personal computers remotely.
The acquisition of Xendity will strengthen Green Packet’s digital identity verification services which is a fast-growing sector as more organisations move towards their digital transformations. Last month, Green Packet announced it had tied up with Tencent Cloud to leverage on the latter’s facial recognition and machine learning capabilities to build a localised e-KYC solution.
Green Packet will acquire 100% of Xendity, with a mix of cash and shares and with performance-based tranches. Green Packet will initially pay US$1.5 million in cash and issue new shares worth US$4 million. Over the next two years, Green Packet will pay up to US$4.5 million via new shares and these payments will be based on Xendity meeting stipulated key performance targets.
Green Packet group managing director and CEO Puan Chan Cheong said the acquisition of Xendity forms a key part of its go market strategy with a solid e-KYC solution.
Xendity has significant operations in Malaysia and is making inroads into Indonesia.
In 2018, CTOS, Malaysia’s leading credit reporting agency, together with Xendity as its technology partner and leading banks, participated in Bank Negara Malaysia's (BNM) e-KYC Financial Technology Regulatory Sandbox.
Having met BNM’s Sandbox’s e-KYC eligibility criteria, CTOS and the banks have made preparations to meet the upcoming BNM E-KYC policy.
However, banks have not deployed this solution to a live service and are awaiting the final outcome of the regulations to be issued by BNM.
One of the founders of Xendity is fintech entrepreneur Sia Hui Yong, who also co-founded Tranglo, an international cross-border payments specialist. Sia was also a nominated finalist in the EY Entrepreneur of the Year 2016 for the technology category.
Green Packet is acquiring Xendity from a group of investors led by Sia who are the founding investors of Xendity, and Vincent Wong who is the founder and CEO of Xendity.
Founded in 2017, Xendity’s team has more than a decade of experience in remittance, compliance, money transfer, global payout as well as providing a seamless experience for onboarding and authenticating customers.
Xendity’s solutions for frictionless payments and compliance monitoring has led to its current partnership with Malaysia’s leading credit reporting agency in Malaysia and the largest inter-bank switch operator in Indonesia with more than 80 bank members. Xendity has also partnered with one of China’s leading public cloud service providers.
With Xendity’s battle-tested solutions, Xendity and partners are able to provide the highest quality e-KYC accuracy and experience, thus reducing operational and compliance oversight for its customers. The solutions are being deployed in various companies in banking, telecommunications and fintech service sectors in Malaysia.
Puan said this acquisition will reinforce Green Packet’s position as the preferred partner for digital financial solutions for various industries in Malaysia including telecommunications and banking.
“We have followed Xendity’s story closely and have been impressed with their achievements in the digital identity landscape. Although they are a new start-up company of about three years, their track record, experience, and capabilities as a main solution provider in the regulated e-KYC and ID management space should be applauded.”
Sia is pleased to join hands with Green Packet to accelerate digital fintech adoption in Asean, particularly in this social distancing era.
“Xendity’s solutions will add significant scale to Green Packet’s digital financial offerings as we strive to get life-improving digital innovations into the hands of the masses. Xendity is a nice bolt on to our journey towards becoming a full-fledged digital financial bank. Amid all, the investment in Xendity is synergistic and complementary to our existing and prospective service offerings, especially within the digital identity ecosystem in Malaysia,” Puan added.
In the last three years, Green Packet has been making inroads towards its digital banking dream by building an ecosystem under the Kiple brand. Green Packet has also made a significant venture into the proptech space, with a licence plate recognition technology.
With its recent collaboration with Tencent Cloud as well as leveraging on Xendity’s robust and quality e-KYC solution, Green Packet is set to offer a complete and holistic end-to-end solution to banks and financial institutions, thus strengthening its company portfolio in the digital banking space.
