This article first appeared in The Edge Malaysia Weekly on January 9, 2023 - January 15, 2023

BIGPAY Malaysia Sdn Bhd, the financial technology arm of low-cost airline Capital A Bhd, is talking to undisclosed potential strategic partners to raise funding for its expansion across Southeast Asia.

“We are in discussion with potential strategic partners across the globe who we believe can add value in fulfilling our mission across the region,” CEO and co-founder Salim Dhanani tells The Edge in an interview. Salim took the helm at BigPay in December 2020.

He points out that in August 2021, the company had raised up to US$100 million in its Series A funding, led by South Korea’s SK Group, to accelerate its growth and scale the business in Malaysia. The funding round also came at a time when it began launching in new markets such as Thailand and Indonesia.

“We also doubled down on our technological expertise, product lines and localised teams for each market, which allowed us to launch new features such as BigPay personal loans, a Stashes budgeting and savings tool and Crypto top-up,” he adds.

The five-year-old start-up offers lending to individuals who cannot avail themselves of credit from banks and other financial institutions. It has been touted to “one day be worth more than AirAsia” by Capital A CEO Tan Sri Tony Fernandes at BigPay’s launch back in 2018.

“We are in a unique position as we’re making traditional financial services highly accessible to a group of users in a region where more than 70% of the population are unbanked or underbanked, propelling BigPay to be one of the fastest growing neobanks in Southeast Asia in 2021, with more than twice the growth in new users despite the Covid-19 pandemic,” says Salim.

In 2021, BigPay together with Malaysian Industrial Development Finance Bhd, Ikhlas Capital Master Fund Pte Ltd — a private equity firm partly owned by former banker Datuk Seri Nazir Razak — and a foreign conglomerate with fintech expertise had joined hands to apply for one of Malaysia’s five digital banking licences. However, they failed to secure the licence from Bank Negara Malaysia.

Despite the setback, Salim says BigPay remains focused on expanding its financial services and introducing more products for the underserved segments. “The launch of our BigPay personal loans product in Malaysia is a prime example of this. Fully regulated by the Ministry of Housing and Local Government, we launched the first-of-its-kind fully digital personal loan product and within three months, we have unlocked credit for over 40% of first-time borrowers in Malaysia.”

The year 2022 was one of momentous growth for BigPay as it managed to achieve a milestone of 1.3 million transacting and carded users on its platform with unprecedented double-digit growth in transaction volume and revenue, says Salim.

“We were able to hit such growth volume as we continued to focus on what really mattered for consumers — highly relevant financial services powered by financial education. As travel slowly recovers to pre-pandemic volumes, we are also seeing an uptake in overseas travel and payment as BigPay offers travellers the best foreign exchange rates for overseas spending,” he explains.

He sees 2023 being another exciting year for the company as it tries to bring BigPay into new markets such as Thailand and Indonesia. “We will also continue to launch new financial services that will help propel our users to the next stage in their financial journey.”

Still, challenges abound, notes Salim, adding that remaining agile with next-generation tech stacks is important for the company.

“Given the uncertainties of the current environment, there is a need for BigPay to remain agile in how we react to changing consumer demands.

“Also, we need to empower our people. Part of the speed of start-ups is having a lean organisation where decisions are made faster. The same mantra applies to BigPay, where we continue to empower our teams to make strategic and data-driven decisions to help deploy new features in a faster, more agile manner.”

Data from the Companies Commission of Malaysia (SSM) shows that BigPay is a wholly-owned subsidiary of Singapore-based Big Pay Pte Ltd, which in turn is a 99.56% owned unit of Capital A.

Apart from Salim, BigPay’s three other directors are Datuk Kamarudin Meranun, Aireen Omar and Kartina Mohd Tahir, the SSM filing reveals.

BigPay’s revenue rose 20% to RM20.28 million in the financial year ended Dec 31, 2021 (FY2021) from RM16.9 million in FY2020. Net loss for FY2021 widened 13% year on year to RM66.66 million from RM59.06 million.

BigPay’s net worth as at Dec 31, 2021, was RM23.05 million.

Asked when BigPay is expecting to turn its first profit, Salim says: “We have been successful in sustaining our growth while maintaining focus on our discipline to build a healthy and sustainable model to drive strong profitability for our shareholders. We have a good trajectory in the coming quarters, and we hope to further accelerate this as travel continues to open to pre-pandemic levels.”

“We maintain a healthy balance sheet despite challenges externally,” he adds.

In February 2022, Fernandes told Nikkei Asia that BigPay will be profitable in 2024.

Under a proposed disposal of Capital A’s aviation assets to its medium-haul affiliate AirAsia X Bhd (AAX) in exchange for AAX shares, Capital A will be a pure digital group with maintenance, repair and overhaul (Asia Digital Engineering), logistics (Teleport), digital (airasia Super App) and fintech (BigPay) businesses. AAX, which will be rebranded as AirAsia Group, will comprise six airlines — AirAsia Bhd, Thai AirAsia, AirAsia Indonesia, AirAsia Philippines, AAX Malaysia and Thai AAX.

The details of the regularisation plan are expected to be announced by end-January or early February, with completion by July, and is designed to help lift Capital A and AAX out of their Practice Note 17 status.

Shares in Capital A are down 14.8% over the past year, closing at 67 sen last Wednesday, valuing the group at RM2.85 billion.

SK Group had in January 2022 said its investment into BigPay was a testament to the ability of Malaysian fintech companies to grow not just domestically but also regionally and become major players in Southeast Asia.

“In BigPay’s case, it also has access to a large consumer and micro-SME ecosystem with AirAsia, which can play a key role in the distribution of financial services and, additionally, brings the experience of having helped the underserved population segments for many years across Malaysia. Given the growing importance of SMEs in the country, BigPay has plans to catalyse intra-regional trade between Malaysian SMEs and the region, by initially leveraging the connectivity and network of AirAsia, combined with its logistics arm, Teleport,” it added.

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