Soft Space Secures Series B Funding from Sumitomo Mitsui, Eyes International Expansionby Fintech News Malaysia April 24, 2018
Soft Space announced the closing of a Series B investment with Sumitomo Mitsui Card Company (SMCC) a wholly-owned subsidiary of Sumitomo Mitsui Financial Group (SMFG), which is one of the largest financial groups in Japan.
Founded in 2012 Soft Space is one of the leading fintech players in Malaysia currently serving over 20 major financial institution across 11 countries. We’ve also previously selected Soft Space as one of the 12 Fintech companies that should be on your watchlist.
Eyeing Expansion in Japan and Beyond
The investment follows the signed Memorandum of Understanding (MOU) and Business Alliance Agreement that happened in early 2017, which will enable Soft Space to gain privileged access to the massive Japanese market. SMCC’s investment in Soft Space will create business growth opportunities within Japan and the ASEAN region.
This alliance allows Soft Space to, among other things, deliver customizable payment system applications; provide cost-effective EMV Smart Card Readers for SMFG and its affiliates; and collaborate with SMCC to explore the possibilities of using Soft Space’s white label solutions. Soft Space also aims to use the Series B funding round as momentum for future funding opportunities to diversify and boost its global reach into new markets.
Strategic Values Beyond Just Funding
SMCC is one of Japan’s leading credit card companies and is the one of the major issuers of VISA cards in the country, with over 25 million cardholders and US$ 110 billion in transaction volume in 2016. By tapping into this vast database of SMCC customers, Soft Space will be able to tailor-make financial solutions that will meet Japan’s consumer needs thereby bolstering Soft Space’s expansion of its business into the lucrative Japanese market.
“SMCC has been around for over 50 years and with this partnership in place, we will work together to build a more sustainable SMCC business model for the next 5 decades. Moving forward, we will collaborate with Soft Space and create market-driven solutions that will boost both our businesses to new heights.”said Ken Kubo, President of Sumitomo Mitsui Card Company.
In Japanese business culture, trust and relationships are of great importance as these values are paramount in building and upholding long-term business relationships. Conventionally, it is very difficult to penetrate the Japanese market due to its traditional nature. Japan is one of the most advanced industrial countries in the world with very little foreign acquisition.
“Soft Space is one of Malaysia’s leading FinTech companies and a strong partner of the Malaysia Digital Economy Corporation’s (MDEC) initiatives. We foresee many potential growth opportunities stemming from their innovative solution and business model.” said Dato’ Ng Wan Peng, COO of MDEC.
She also noted that funding from SMCC is expected to boost Soft Space’s competitive edge and support their expansion into new markets. Japan is also seen as a traditionally cash-centric society with 62% of consumer payments being made by cash in 2016 (Euromonitor International, 2016)1. But with the 2020 Tokyo Olympic Games coming up, which is expected to attract some 40 million foreign tourists all around the world, the Japanese government has been making continuous efforts to empower businesses to expand digital payment services within its shores.
With SMCC’s assistance, Soft Space will look to provide a comprehensive financial platform for businesses, and accelerate the shift in mindset of the Japanese population towards the adoption of digital payment solutions instead of cash. “By aligning our synergistic strengths with SMCC and its affiliates, we will work together to expand our business growth opportunities and to provide innovative e-payment solutions that can transform their cash-centric payment lifestyle.” said Tay.