FinTech: Western Union Acquires 15% Of Saudi Fintech stc pay For $200M
stc pay becomes the first Saudi unicorn and first fintech unicorn in the Middle East.
Western Union (NYSE: WU) has taken a 15% stake in stc pay for $200 million, valuing the Saudi fintech at $1.3 billion. Western Union is the world’s largest remittance company. stc pay is a 100% subsidiary of Saudi Arabia’s stc Group. (Arab News)
Western Union will initially pay $133.3 million to acquire a 10% stake in the Saudi fintech. It will acquire another 5% for $66.67 million if stc pay obtains a digital banking license.
stc pay is the first fintech company in the Kingdom to receive a license from the Saudi Arabian Monetary Authority (SAMA).
It is also the largest digital wallet in the MENA region with more than 4.5 million users.
It has been established in accordance with the objectives of Saudi VISION 2030. Those are to support the growth of the national economy, to enhance financial inclusion, and reduce dependence on cash.
First unicorn in Saudi Arabia and first fintech unicorn in the Middle East
HRH Prince Mohammed bin Khalid Abdullah Al Faisal Chairman of stc Group, said the decision by Western Union to make such a significant Foreign Direct Investment in its fintech subsidiary was highly encouraging.
“For us at stc Group it reflects our position as a digital enabler and an ICT regional champion as we celebrate the creation of the first Saudi unicorn and the first fintech unicorn in the Middle East,” he added.
“stc pay has rapidly developed a leading regional digital payments service over the past two years and has been a highly successful digital partnership for Western Union,” said Hikmet Ersek, CEO and President, Western Union. “Looking forward, we believe stc pay is well-positioned for continued expansion in digital payments.”
Use of funds
stc pay will use funds to boost its capital resources and to fund its plans for long-term expansion.
The Saudi fintech also intends to launch more products for its customers.
In July this year, stc pay and Visa (NYSE: V), the world’s leader in digital payments, entered into a strategic partnership. They would launch customer-centric financial services and digital payment solutions to stc pay customers.
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