South Korea’s SK Group will invest the amount in AirAsia’s BigPay fintech unit.

South Korean conglomerate SK Group (KRX: 034730) has agreed to invest up to $100 million in BigPay, a unit of the fintech arm of budget Malaysian airline AirAsia. BigPay offers a prepaid debit card, local and international money transfers, micro-insurance, bill payments, and a budgeting tool.

Founded in 2017, BigPay has ambitions to become a challenger bank and democratize financial services for Southeast Asian consumers and entrepreneurs. (AirAsia)

AirAsia eyes in-house challenger bank

“Our ambition has always been to establish BigPay as one of the largest challenger banks in Southeast Asia,” said Salim Dhanani, CEO & Co-Founder of BigPay, in a statement. “Closing this financing round gives us the ability to build out our offerings, accelerate product development and scale.”

According to Reuters, AirAsia’s business has suffered during the pandemic, and hence it is trying to develop its digital businesses including fintech, logistics, and travel and lifestyle apps.

Reportedly, AirAsia is eyeing the development of a “super-app” that will straddle all the needs of its flyers and then some. This super-app is said to be already valued at around $1 billion.

In July, AirAsia Digital acquired Gojek’s operations in Thailand to boost the reach of its apps across the ASEAN region.

It also applied for a digital banking license in consortium with Malaysian Industrial Development Finance, Ikhlas Capital, and a foreign conglomerate with fintech expertise.

“This is the first investment into one of our portfolio digital companies and a testament to our digital growth story – we don’t anticipate it being the last,” said AirAsia Group CEO, Tony Fernandes. “SK Group is second to none when it comes to innovation and experience, so we truly believe they can share their expertise and know-how so that this investment can mark the beginning of a new exciting digital banking era.”

“We’ve had a keen interest in fintech and digital banking for a long time,” said Chief Representative of SK Malaysia, Jung Kyu Kim. “SK Group will be able to make a significant contribution to BigPay in both technical and consumer service aspects given our experience and resources.”

SPAC deal in the US

Reuters reported last month that AirAsia was mulling a listing of its digital arm via a special-purpose acquisition company (SPAC) in the United States and the deal could raise at least $300 million.

Fernandes told Reuters that Air Asia had already been approached by a few SPACs focused on technology.

The digital arm was also in advanced talks to raise a loan of $1 billion, Fernandes said.

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