BAI Invests In Chinese Fintech Company Reap
The investment fund Bertelsmann Asia Investments (BAI) has participated in a second round of fundraising for the Chinese fintech company Reap. Reap helps small businesses use their credit cards to gain secure access to alternative sources of funding – in view of the corona-virus pandemic, this is often an existential problem.
The Hong Kong-based financial technology company Reap has completed a second round of financing, in which the investment fund Bertelsmann Asia Investments (BAI) participated. The company raised a total of $5 million from investors such as Global Founders Capital, Index Venture, Fresco Capital, Hustle Fund, which will now be used to broaden Reap’s products and services and expand across Asia.
Reap provides payment solutions that enable small and medium-sized enterprises to pay expenses and collect revenue from anyone, anywhere in the world via a credit card. Without this solution, companies often have limited access to traditional sources of financing. With Reap, they can digitalize their own financing solutions and gain quick access to alternative sources of liquidity, which in turn helps them optimize their cash flow and capital efficiency. Both are critical to driving growth – or even just surviving – in the post-Covid-19 economy.
Credit cards as a rolling source of credit
Daren Guo, co-founder of Reap, explained: “We are thrilled to be supported by leading global investors. We launched the company because small businesses need a reliable partner who understands their financing challenges and delivers solutions designed to meet their needs. We are deploying these newly raised funds at a time when many small businesses in Hong Kong are struggling to help rebuild the local economy.” Guo added that SMEs constitute over 98 percent of Hong Kong business establishments and employ about 45 percent of the city’s private sector workforce. Reap enables small businesses to use their credit cards as a rolling credit source. The company’s solution is delivered securely with its technology partner, Stripe, one of the world’s largest online payment processing firms. Reap is also recognized by Visa as a Business Payments Solution Provider. Reap reports that its transaction volume has grown at a compound annual rate of 40 percent per month over the past year, amounting to more than US$100 million since the company was founded two years ago.
Looking to the future, Kevin Kang, co-founder of Reap, says: “We are proud to work with our investors, partners and clients to help rebuild Hong Kong’s economy. The same Visa survey showed that only 21 percent of SMEs in Hong Kong have invested in digital transformation tools to boost productivity, and cash flow management is a key component of this. We want to help businesses across Asia access these tools via a cloud-based platform that requires minimal investment but has the potential to deliver outsize returns.” Reap currently provides digital credit payment processing and revenue collection services in Hong Kong, Singapore and Vietnam will soon launch in Malaysia and South Korea. Bertelsmann Asia Investments Managing Director William Zhao, adds: “Reap is Bertelsmann Asia Investments’ fourth portfolio company in the global digital banking and payments sector. We are excited to work with Daren and Kevin and the team to build a leading digital financial technology company which delivers services to small and micro enterprises in Southeast Asia and beyond.”