Local fintech player Aleta Planet is seeking to expand its market share in the Middle East following an investment from a United Arab Emirates conglomerate.
Aleta Planet founder and group chairman Ryan Gwee told The Straits Times on July 31 that the undisclosed funding from National Pulse will help the firm expand its footprint in Dubai, as well as the broader Middle East and Africa, where there is a growing presence of Chinese businesses.
Aleta, which Mr Gwee describes as a “China-centric” fintech company, will also move its headquarters from Singapore to Dubai home to over 6,000 Chinese businesses in industries such as logistics services, transport and renewable energy.
“Singapore allows us to serve the Singapore, Malaysia and Australia markets – these are declining markets in terms of Chinese investments Singapore is also a market of probably 600,000 small and medium-sized enterprises (SMEs) and that is a very small market,” Mr Gwee said.
“Moving our headquarters to Dubai is important because of the market we serve there UAE has a population of 10 million and the whole Middle East has 480 million The size of the market and the timezone mean that we have to be there.”
Mr Gwee also noted that the operating costs in Singapore are too high, which is why the majority of the firm’s headcount is in China and Malaysia. Aleta will soon have to “create the infrastructure” in Dubai, he said, without elaborating on the details.
Founded in Singapore in 2014, Aleta initially focused on cross-border business-to-business digital payments through the UnionPay network, but has since expanded into business-to-consumer service offerings.
The firm’s China-centric offerings include a remittance service on the AXS app, which allows money transfers to China for a flat fee of $1 through UnionPay, the primary card network in China. They also offer a virtual card called AP-1 for QR code or contactless payments via UnionPay, enabling Singaporeans and other visitors without local Chinese bank accounts to make purchases in the country.
The AP-1 card also allows SMEs in Singapore to pay directly into their mainland suppliers’ accounts within 60 seconds and at half the cost of what traditional banks charge.
In 2019, Aleta developed a blockchain-based online platform called Global Tracer with homegrown agrifood solutions company DiMuto that helps suppliers and retailers verify the condition of perishable produce such as fruit and vegetables. The platform also facilitates cross-border payments between suppliers and retailers.
Mr Gwee said that Dubai has become a booming market for Chinese businesses, which find it easier to use fintech platforms like that of Aleta which enable transactions through UnionPay.
He noted that Aleta’s proprietary technologies will help these companies make cross-border payments securely and trace the flow of perishable goods across the global supply chain.
Dubai is the biggest re-export market for China in the Middle East, with bilateral trade reaching US$95 billion (S$127 billion) in 2023 and is expected to grow to over US$200 billion by 2030, according to official data.
“What we will provide in Dubai is a form of cultural acceptance where we will be able to issue accounts for the Chinese and explain to them how the financial system in Dubai works and hopefully help to localise them,” Mr Gwee said.
Data from consulting firm Kapronasia noted that the UAE is ranked as the leading fintech hub in the Middle East and Africa, with funding jumping 92 per cent to US$1.3 billion in 2023. Singapore’s fintech industry attracted US$2.2 billion in funding in 2023, down 68 per cent from the previous year, according to data compiled by professional services firm KPMG.
When asked if more fintech companies from Singapore are setting up in the UAE, National Pulse founder and group chairman Mohammad bin Markhan Al Ketbi said that Aleta is one of the few with a “clear vision” of its mission.
“We have a couple of companies focused on artificial intelligence (AI), but not many in fintech,” he said.
Aleta has plans to set up a joint venture with National Pulse to focus on business-to-business cross-border transactions, initially targeting the agricultural and logistics sectors in the Middle East.
Mr Gwee said that the “end game” for Aleta depends on how quickly it wants to expand, and that if the firm decides to scale up, the capital markets would be an appropriate avenue.
“The UAE and the Middle East have very interesting capital market setups – they have the Dubai Nasdaq and the Abu Dhabi Securities Exchange. The liquidity is there, and the amount of money there is very different,” he said.
Source: straitstimes