Allianz Group’s digital investment unit acquires undisclosed stake in Hong Kong fintech unicorn WeLab for US$75 million, as it eyes Greater Bay Area opportunities

Allianz X has made the investment as part of WeLab’s Series C-1 fundraising
The Hong Kong unicorn will also team up with Allianz’s asset management arm to develop wealth management sales platforms

Banking & finance

Enoch Yiu

Published: 3:00pm, 8 Mar 2021

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Allianz Group’s digital investment unit has acquired an undisclosed stake in WeLab, Hong Kong’s home-grown fintech unicorn, for US$75 million, as it eyes opportunities in the Greater Bay Area.

Allianz X made the investment as part of WeLab’s Series C-1 fundraising, the two companies said on Monday. “This is our first fintech investment in Hong Kong. We are excited to invest in WeLab, which has established successful fintech platforms in Asia. As one of the fastest growing regions in the world, Asia is strategically important for Allianz,” Nazim Cetin, Allianz X’s chief executive (CEO), said in a joint interview with Simon Loong, the founder and CEO of WeLab.

The companies declined to disclose the exact shareholding structure, but Loong, a former Citi and Standard Chartered banker, said Allianz X was “an important shareholder of WeLab”. Cetin will join the fintech unicorn’s board to advise on important decisions, but will not intervene in its daily operations.

Cetin admitted the bay area development zone was part of the attraction for Allianz X. The German company has several investments in Asia, including those in logistic apps GO-JEK, Southeast Asian property platform 99.co and Indonesia’s health products app Halodoc.

The development plan was first announced in 2016 by the Chinese government to spearhead growth and innovation in 11 cities, including Hong Kong and Macau. Beijing will also allow financial services ranging from banking to wealth management to be liberalised within the area’s geographical limits.

WeLab’s Simon Loong, left, and Allianz X CEO Nazim Cetin during their interview with the Post. Photo: Handout

“The Greater Bay Area has a GDP of around US$1.7 trillion, which is larger than that of some G20 countries. This investment and partnership will allow us to tap opportunities in this area,” Cetin said. The cluster, which would qualify as the world’s 11th-largest economy behind Canada and ahead of Russia if it were a stand-alone entity, provides a potential market 10 times the size of Hong Kong.

WeLab has expanded rapidly in Hong Kong, mainland China and Indonesia, and provides online lending and virtual banking services to 50 million customers. It also owns one of eight virtual banking licences granted in Hong Kong. And thanks to this licence, it will qualify for the soon-to-be-launched cross-border wealth management connect scheme, which will allow residents of the Greater Bay Area to invest in investment products in Hong Kong through local lenders. At the same time, Hongkongers will also be able to trade mainland investment products through mainland banks.

“We see this as being a four-way partnership – in fintech, digital banking, insurance and wealthtech. But it’s more than just traditional ‘fin’ and ‘tech’ together. There are endless possibilities in terms of what we can do together,” Loong said. WeLab will also partner with Allianz Global Investors (AllianzGI), a major asset management arm of Allianz, to establish wealth management platforms that sell fund products by AllianzGI and other companies, he added.

The two companies struck the deal following many online meetings amid the Covid-19 pandemic, which has blocked international travel, but has led to a surge in digital finance usage.

“The pandemic has led many people to switch to online, including those you wouldn’t expect,” Cetin said. “I’d never have imagined my 78-year-old father-in-law would go digital. But now he and his iPad are inseparable!”

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