Cross River Bank and V Capital set to disrupt banking in Asia
KUALA LUMPUR, Malaysia, April 23, 2020 /PRNewswire/ -- Following the 2018 round of financing led by KKR with participation of Battery Ventures, Andreessen Horowitz, Ribbit Capital & Credit Ease; Shefa Capital has decided to partner with V Capital Investments Limited to lead the Series C PRE IPO USD100 million investment in Cross River Bank ("CRB"). Through this round of investment in CRB, V Capital also became CRB's strategic partner in the South East Asia region. With the fintech offerings made available through this partnership, V Capital is also working toward the application for the Digital Bank Licence in Malaysia which will allow V Capital to offer its fintech offerings to a larger section of the public.
CRB, through its innovative and revolutionary fintech offerings, aims to disrupt the US and global commercial banking industry. In the USA, there are around 5,000 commercial banks as of 2019, generating approximately USD250 billion in annual revenue.
There is a paradigm shift in the financial industry. With the digitisation of the market economy, there is an increase in the number of commerce and service businesses embracing web and mobile interaction with their customers. Due to the diverse needs of each business, it is no longer practical to rely on human execution of banking transactions. Major banking and financial institutions are turning to automated services to provide faster, easier banking experiences to their customers. In the current market, fintech companies account for roughly 40% of the loan origination and payment markets, which is worth several trillions of dollars.
CRB has built a modular approach that provide its consumer, including fintech companies and regular companies such as Amazon, Google, Uber and Coinbase with access to the digital payment services, digital lending options and digital deposits services. And due to the fact that CRB is an FDIC insured bank regulated under the relevant regulations, the above mentioned fintech services provided by CRB have fully complied with the relevant rules and regulations. CRB's customers can also provide an enhanced cross-platform experience for their customers thanks to CRB's seamless integration of the digital banking platforms of these companies.
This symbiotic relationship between CRB and its customer is leading to huge growth. And there is further growth in the near future, with CRB currently on-boarding around 200 new companies to their platform, making them the bridge between the conventional, outdated banking paradigm to the new digital banking and financing age.
V Capital chairman Tan Sri Mohamad Fuzi Harun said its partnership with CRB would bring together some of the latest financial technology that western fintech has to offer, with the resources, market reach and technical know-how in South-East Asia to be provided by VCI.
"This partnership will ensure that VCI and CRB will be the leading players in the South-East Asian fintech ecosystem in the next five years."
Speaking at the announcement of the partnership, Mohamad Fuzi said that even though Malaysia was still a predominantly cash-based society, the Malaysia Digital Economy Corporation (MDEC) haS already engaged with start-ups, investors and innovators from around the world to create a vibrant fintech environment here.
For example, he said, MDEC has initiated the Accelerators initiatives to provide fintech start-ups with opportunities for local and foreign investment.
"And with the technological breakthroughs brought about by the partnership between VCI and CRB, Malaysia is set to witness a major fintech breakthrough which could be a catalyst that leads to further advancements in fintech," he said.
In an effort to mitigate any potential risks, CRB does not only rely on single source of revenue. The multiple source of income for CRB includes banking fees from loan origination and transaction fees from payment services. CRB's strong financial performances are testaments to the work and effort which CRB had put in to constantly improve its business structure. CRB had recorded USD200 million in revenue in 2019 with the revenue expected to increase to USD 550 million.
CRB, which is slated to for an IPO in the US next year, was listed as among the 50 most innovative fintech companies in 2019 by Forbes.
About V Capital
V Capital is a global advisory firm headquartered in Malaysia. We provide expert advice on multiple industries, including but not limited to corporate advisory, real estate advisory, digital advisory, project advisory and business advisory. Fund management services that are catered to high net worth individuals and organisations are also part of our forte.
Our services are extended to a wide range of clients, whether you are a multinational corporation, institution, government agency, SME, an entrepreneur or a start-up who is, going through an IPO, in the process of being acquired, seeking funding, intending to lobby for a multibillion dollar infrastructure project or trying to unlock the latent value of your real estate, our dedicated team of advisors is readily available to provide our expertise and assist you in any business cycles and situations.