MANILA -- Chinese internet company Tencent Holdings and U.S. private equity firm KKR will jointly invest up to $175 million in the financial technology unit of Philippine telecom PLDT.
The deal takes the battle between Tencent and Alibaba Group Holding for mobile payment supremacy to the Philippines. Last year, Alibaba affiliate Ant Financial Services Group invested 45% in the fintech arm of Globe Telecom, PLDT's leading rival.
PLDT said late Thursday that Tencent and KKR will separately buy newly issued shares from Voyager Innovations, which holds assets like mobile wallet PayMaya and Lendr, a digital lending platform.
PLDT will remain the controlling shareholder of Voyager once the deal is finalized in the fourth quarter. But the transaction allows "other investors" to buy additional shares in Voyager, a move that would reduce PLDT's ownership to less than 50%, the Philippine company said.
"The target is $225 million [in total investment]," said Manuel Pangilinan, PLDT's chairman and CEO. "[The investment] reinforces the strength of Voyager in pursuing [the growth] of PayMaya and Lendr."
Since Ant Financial invested in Globe Fintech Innovations, also known as Mynt, Voyager has battled a competitor that has grown more aggressive in attracting users and partner merchants. Last year, Mynt's mobile wallet platform GCash rolled out a QR code payment system, with Alibaba founder Jack Ma Yun himself flying to Manila to join the launch.
"Voyager connects the growing smartphone population in the Philippines to online payments and financial services," said James Mitchell, Tencent's chief strategy officer. "Tencent is glad to support Voyager Innovations and to advance financial inclusion."
The Philippine mobile payment sector should benefit from the entry of Tencent -- the company behind the ubiquitous WeChat in China -- and Ant Financial, the developer of the equally widespread Alipay platform.
But the two rivals, which compete in areas ranging from music and video streaming to e-commerce in mainland China, will be fighting over a market where cash remains king and internet service is notoriously slow.
Opening Voyager to other investors could lessen PLDT's financial burden and let the company focus on its core telecom business, some of which has been lost to rival Globe, a joint venture of local conglomerate Ayala Corp. and Singapore Telecommunications. PLDT over the past few years has invested around 10 billion pesos ($184 million) in Voyager, which has yet to make money, Pangilinan said in August.
