PETALING JAYA: Areca Capital Sdn Bhd is increasing its investment in digital startups, the latest being fintech firm MobyPay, to support the expansion of buy-now-pay-later (BNPL) financing in the country.

       However, Areca Capital executive director and chief executive officer Danny Wong Teck Meng did not reveal the amount of its investment in MobyPay. He noted, though, that it was involved in the startup’s seed funding stage.

       “Over the last two to three years, we have started to invest in startups as part of our digitalisation strategy. Presently, including MobyPay, we have invested in three startups,” he told reporters at a virtual press conference.

       Areca Capital is a boutique asset management house with RM2.7bil assets under management (AUM).

       Wong said Areca Capital has set up a specific fund aimed at giving its clients exposure to the companies involved in digitalisation as investors’ appetite for the technology-related industry has picked up.

       “As our internal measure, we are targeting to allocate 10% of our AUM for our investment in digital assets and businesses,” he added.

       MobyPay is a Malaysia-based fintech provider that started offering its BNPL service in the last three months. It allows customers to take on three-month installment plans with 0% interest and a spending limit of up to RM10,000.

       It has also tied up with e-payment gateway iPay88, giving it access to over 35,000 merchants.

       MobyPay founder and CEO Rian Philip said the company aims to increase its installment plans to up to 18 months, depending on the market behaviour towards BNPL.

       “MobyPay is in negotiations with several other payment gateways while onboarding some online stores directly,” he said.

       Wong reckoned that MobyPay could be the next “unicorn” startup from Malaysia as more people adopt and learn about the offer.

       “We are excited to invest in MobyPay’s strong offering, which is powered by the team’s credit assessment experience and backed by data,” he said.

       BNPL is seen as the upcoming fintech trend popularised by companies such as Australia’s Afterpay, which recently saw a mouthwatering US$29bil (RM121.51bil) acquisition offer from Square Inc, the digital-payments platform led by Twitter Inc founder Jack Dorsey.

       Wong said Malaysia lags behind other countries in the region in adopting BNPL, but is gradually catching on to the trend.

       BNPL is a type of short-term financing that essentially allows consumers to make a purchase but pay for it later or via installments over a short period.

       According to Philip, what makes BNPL unique compared to credit-card led installments is that the ticket size could be as low as RM300 and this would enable wider access to short-term financing.

       Moving forward, Wong said Areca Capital may also be involved in providing financing needs for MobyPay.

       “Eventually, we would also be involved in MobyPay’s operation and there could be more rounds of fundraising required to grow the business,” he said.

       He added that Areca Capital would be looking for more potential startups especially in the technology space as more businesses have to adopt technology for growth.

       “Compared to the dot-com boom back in 2000, many technology startups have a real tangible business. We expect this is going to be a megatrend for the next three to five years,” Wong said.