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Green Packet (GPACKET, 0082) buying e-KYC specialist firm

Green Packet MD and CEO Puan Chan)pic): Xendity's solutions will add significant scale to Green Packet's digital offerings.

PETALING JAYA: GREEN PACKET BHD is acquiring technology firm Xendity Pte Ltd for US$10mil (RM43mil), as part of its move to strengthen its digital identity verification services.

Singapore-based Xendity, which has significant operations in Malaysia and making inroads into Indonesia, specialises in identity verification processes using e-KYC (electronic know your customer) technology.

“The acquisition of Xendity will strengthen Green Packet’s digital identity verification services, which is a fast-growing sector as more organisations move towards digital transformation, ” said Green Packet in a statement.

“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.”

Green Packet said the acquisition of Xendity would be made via a combination of cash and shares, as well as performance-based tranches.

“Green Packet will initially pay US$1.5mil (RM6.4mil) in cash and issue new ordinary shares worth US$4mil (RM17mil). Over the next two years, Green Packet will pay up to US$4.5mil (RM19mil) via new shares and these payments will be based on Xendity meeting stipulated key performance targets.

“Green Packet is acquiring Xendity from a group of investors led by Hui Yong who are the founding investors of Xendity, and Vincent Wong who is the founder and chief executive officer of Xendity.”

In the same statement, Green Packet group managing director and chief executive officer Puan Chan Cheong said the acquisition of Xendity formed a key part of the company’s go-market strategy with a solid e-KYC solution.

He added that the acquisition would 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 its achievements in the digital identity landscape. Although it is a new startup company of about three years, its track record, experience and capabilities as a main solution provider in the regulated e-KYC and ID management space should be applauded.

“We could not be more excited to start a new adventure with Xendity. 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.”

Puan said Xendity “is a nice bolt” on Green Packet’s journey towards becoming a “full-fledged digital financial bank.”

“Amidst all, the investment in Xendity is synergistic and complementary to our existing and prospective service offerings, especially within the digital identity ecosystem in Malaysia, ” he said.

Meanwhile, Xendity founding investor Hui Yong said the group is pleased to partner with Green Packet.

“We are very pleased to join hands with Green Packet to accelerate digital fintech adoption in Asean, particularly in this social distancing era. I’m very confident of our synergies will help to realise this vision together.”

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.

Since 2018, Xendity has participated in Bank Negara’s e-KYC Financial Technology Regulatory Sandbox by working with seven leading banks in Malaysia. Subsequently, after meeting the Sandbox’s e-KYC process criteria from the central bank, these seven banks have begun to deploy Xendity solutions.

As a result, Xendity today has become the e-KYC provider in Malaysia with the largest deployment of its solutions in the local financial institution market.

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.

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, ” said Green Packet.

In the last three years, Green Packet has been making inroads towards its digital banking dream by building an ecosystem under the Kiple brand.

This ranged from the first few local technology firms licensed to build “white-labelled” e-wallet solutions for Malaysian enterprises; to being deeply ingrained into the student market by powering the payment system and becoming the fintech partner to facilitate fund disbursements under some state welfare programmes.

“Green Packet has also made a significant venture into the proptech space, with a licence plate recognition technology that is fast becoming popular among Malaysians and the launch of its flagship KipleLive solution under We Are Ready campaign. Eventually, this solution will link to the group’s digital payment system, ” Green Packet said.

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.

“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, ” said Green Packet.

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