Tencent Holdings Limited has become a “substantial shareholder” of Afterpay, according to an announcement from the company. The Chinese technology firm purchased a 5 percent stake in the buy now, pay later (BNPL) company valued at approximately A$390 million per a published report.
Afterpay’s co-founders, Anthony Eisen and Nick Molnar, said in the announcement, “We feel very privileged to welcome Tencent as a substantial shareholder in our business. Being able to attract a strategic investor of this calibre is extremely rewarding and is a testament to our team and the strength of our differentiated business model.”
Tencent, for its part, is a Hong Kong Stock Exchange-listed firm. The firm offers “Internet value-added services” per the announcement, encompassing online advertising, digital entertainment and FinTech as well as cloud services to users. Its communication platforms encompass WeChat, QQ and Weixin.
The Weixin Pay offering is said to be the leading mobile payments technology in China, helping to make an average of more than 1 billion commercial transactions daily occur.
Tencent Chief Strategy Officer James Mitchell, said in the announcement, “We are pleased to become investors in Afterpay. Inside China we operate the leading digital payment service and a rapidly growing FinTech platform, and outside China we have actively invested in pioneering FinTech companies, providing us with unique insights into emerging FinTech services.”
As previously reported, the Q3 results of Afterpay indicated that its BNPL online payment method keeps bringing in customers. Its number of American customers jumped to 4.4 million. The company’s model lets customers pay for products in interest-free installments.
The firm noted its “stickiness and quality of the customer base” per a past report, with 90 percent of its gross merchandise volume (GMV) originating from repeat customers throughout the globe in Q3 fiscal 2020. GMV is an eCommerce term that indicates the total sales dollar value for products.
The Australia-based company said per past reports that it has “maintained a strong position through the COVID crisis.”