Hong Kong tycoon Richard Li-backed fintech Hyphen in advanced merger talks with blank-cheque firm Provident

Hyphen Group, a financial technology firm backed by Hong Kong billionaire Richard Li Tzar-kai, is in advanced talks to go public through a merger with blank-cheque company Provident Acquisition, according to people familiar with the matter.

A transaction could value the combined company at about US$1 billion, the people said, asking not to be identified because the matter is private. The deal may include a private investment in public equity, or PIPE, of about US$100 million anchored by institutional investors, the people said.

Talks are at an advanced stage and a transaction could be announced before the end of this year, the people said.

The special purpose acquisition company (SPAC) is led by Winato Kartono and Michael Aw, two key executives at Provident Group, an investment fund targeting Southeast Asian start-ups. Some of its high-profile investments include Indonesia’s ride-hailing giant Gojek, online travel company Traveloka and Thailand-based online fashion retailer Pomelo.

Provident raised US$230 million in a US initial public offering in January. The blank-cheque firm said it would pursue a business combination with a focus on consumer technology companies in Southeast Asia.

Negotiations are ongoing and could be delayed or fall apart, the people said. A representative for Hyphen declined to comment, while a Provident representative did not immediately respond to requests for comment.

Nasdaq-listed shares of Provident rose 0.8 per cent on Tuesday, the most in more than two weeks. 

Hyphen has been working with Goldman Sachs to review funding options including a listing via a SPAC or a private fundraising, Bloomberg reported in July. The company had drawn interest from potential investors valuing the company at more than US$500 million, the people said.

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Hyphen, formerly known as CompareAsiaGroup, helps people find the right credit cards, personal loans, and other financial products using tech-driven comparison tools, according to its website. It counts more than 11 million users a month across its eight brands and has expanded both organically and via acquisitions such as its purchase of Singaporean personal finance firm Seedly from ShopBack last year.

Hyphen has so far raised more than US$110 million from investors including Li’s investment manager Pacific Century Group, Alibaba Group Holding, Goldman Sachs, the World Bank’s International Finance Corporation and Experian.