Irish payments startup buys Convoy's payment unit

Dublin-based CurrencyFair takes a first step into Asia, buying a unit of Convoy Holdings – a company at the centre of an anti-corruption investigation. Convoy will invest in CurrencyFair.

A fintech startup from Ireland is to work with a controversial Hong Kong financial group as it seeks a foothold in Asia.

Dublin-based CurrencyFair, a nine-year-old start-up that provides payment services to companies and individuals, has bought a 100% stake in Convoy Payments from Convoy Global. In return, Convoy Global  – whose shares have been suspended since a December raid by Hong Kong's securities regulator and anti-corruption agency – will become an investor in CurrencyFair.

Financial terms for the partnership were not disclosed, but CurrencyFair – which said it was aware of Convoy's legal issues – said the deal was part of a €20 million ($21.16 million) global investment plan

“We’ve always planned to be in Asia. And we’d always planned that Hong Kong would be the first area that we’d move into. And that acquisition help us move into China,” Ruth Fletcher, chief financial officer of CurrencyFair, told FinanceAsia in an interview on Wednesday.

Fletcher said the acquisition would provide a gateway to carry out money transfers into China, as well as giving it access to a group of US-based clients.

“Top priority number one will be the integration with Convoy Payments and getting out the renminbi products. And Singapore is next on the line,” Fletcher said. “The renminbi business is extremely important to us and that will be one of the first things we’ll do as close this deal.”

CurrencyFair said it had raised €25 million since it was started in 2009. The startup is looking to provide an alternative to banks for ordinary people and small businesses seeking to transfer money.

To be sure, the Convoy payment unit has an exisiting banking relationship in China to help its offshore clients to wire their money into the country, but the unit itself doesn't have a licence to operate in the country. Fletcher said the newly-acquired unit is currently exploring a banking partnership in China, potentially helping onshore Chinese to move their capital out of the country.

“The banks still have such a huge part of this market that any and all education is good to help people understand the benefits that we can offer,” said Fletcher. “The apathy, getting our customers to change over and try something new. It is difficult.”

As for the future, Fletcher expects the company to remain private for the time being.

“IPO isn’t on our list,” said Fletcher, a former CFO of Frontline Ventures, a Dublin-based venture capital firm. “It may be something we consider in the future, but it’s not on the near-term agenda.”

Convoy has been in the spotlight since May last year, when shareholder activist David Webb placed it on a list of 50 Hong Kong companies not to own, part of a complex trangle of companies with significant crossholdings, which he dubbed the “Enigma Network”.

In December, officers of the Securities and Futures Commission and the Independent Commission Against Corruption raided Convoy's offices and arrested three directors on suspicion of corruption. The ICAC has yet to announce any charges against the three, who were suspended by Convoy.

Convoy has since been working to restore its listed status, including overhauling its management and appointing a new chairman, directors and auditors. It also launched a rebrand earlier this year.

Founded in 1993, Convoy Global is one of the largest independent financial advisory firms in Hong Kong and claims more than 100,000 clients


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