Axiata’s Fintech Unit Eyes Funding Round to Expand Holdings, Sources Report

Axiata Group, the Malaysian telecommunications giant, is reportedly considering a fundraising round for its fintech subsidiary, Axiata Digital Services (ADS), to expand its holdings in Southeast Asia. According to sources familiar with the matter, the fundraising could potentially value ADS at around $500 million.

The move comes as Axiata continues to ramp up its presence in the region’s fast-growing digital economy, particularly in the fintech sector. The telecom giant has been investing heavily in ADS, which currently operates a portfolio of digital financial services including e-wallets, mobile payments, and microloans.

Sources say that the fundraising round is expected to take place later this year, with Axiata exploring options including a potential sale of ADS shares to strategic investors. The company is said to have already held preliminary discussions with several potential investors, including private equity firms and sovereign wealth funds.

The funds raised from the fundraising round will reportedly be used to expand ADS’s product offerings and services, as well as to pursue potential acquisitions of other fintech companies in the region.

Axiata’s focus on expanding its fintech holdings is in line with its strategy to become a digital services powerhouse in Southeast Asia, as the region continues to experience explosive growth in digital commerce and financial services. The company has stated that it aims to become one of the leading players in the region’s digital economy by 2025.

However, Axiata faces significant competition in the crowded fintech space, where numerous players are vying for market share. In addition, regulatory challenges and a fragmented market pose significant hurdles for companies looking to scale their operations in the region.

Despite these challenges, Axiata has continued to make significant strides in the fintech sector, with ADS emerging as a major player in the Southeast Asian digital finance landscape. The company has also formed strategic partnerships with several major players in the space, including Telenor’s e-wallet unit, Wave Money, and Indonesian e-commerce giant Tokopedia.

As Axiata continues to pursue its ambitious growth strategy in Southeast Asia, it will be interesting to see how the company navigates the complex regulatory and competitive landscape in the region’s fast-evolving digital economy. However, with its deep pockets and growing expertise in the fintech space, the telecom giant seems poised to play a major role in shaping the future of digital finance in the region.