TA Associates, a leading global growth private equity firm, announced it has completed an investment in YeePay, a leading payments service provider in China. Far East Horizon Ltd (HKG: 3360), a provider of tailored financial leasing and other value-added services, partnered with TA on the investment. Financial terms of the transaction were not disclosed.
Founded in 2003, YeePay provides online and offline integrated payment solutions enabling consumers and businesses to make and receive payments via the Internet, mobile devices and phones. The Company focuses on a variety of sectors, including airline & travel, asset management, digital entertainment, education, fast moving consumer goods, insurance and telecom. YeePay has access to more than 100 commercial banks in China and was among the first businesses to obtain a nationwide payment license from the People’s Bank of China. YeePay is also licensed by the China Banking Regulatory Commission to conduct mutual fund-related transactions, and by the State Administration of Foreign Exchange for cross-border transactions. The Company has over 93,000 active merchant customers and operates in more than 20 provinces. In 2014, YeePay processed US$77 billion of transactions, up over 100% from 2013. YeePay is headquartered in Beijing, with 31 regional offices across China.
“YeePay offers a number of very compelling investment attributes, including a diversified customer base featuring some of the leading brands in China, an attractive recurring revenue model and an experienced management team,” said Edward F. Sippel, Managing Director and Co-Head of Asia at TA Associates Asia Pacific Ltd. “As a pioneer in customized and innovative merchant payment solutions, YeePay has significant market share in a number of verticals, including dominant positions in airline & travel, digital entertainment and education. We are very pleased to have advised on this investment and look forward to a close collaboration with the talented YeePay team and our investing partners at Far East Horizon.”
“We welcome TA Associates and Far East Horizon as investors in YeePay,” said Bin Tang, Co-Founder and CEO, YeePay. “Since our founding, we have enjoyed continued growth and believe a partnership with a growth private equity firm like TA, and an innovative and experienced financial services provider such as Far East Horizon, will prove highly beneficial to our continued success. We will leverage their financial support and strategic guidance as we pursue a variety of market opportunities, including the introduction of additional value-added services.”
“As a leader in a large and growing market, YeePay is very appealing to the principle investment arm of Far East Horizon,” said Jun Yang, Deputy Head of Principle Investment Arm of Far East Horizon Ltd, which initiated this investment in YeePay. “We welcome TA to join our investment in YeePay as a partner that shares our deep commitment to the pursuit of excellence and to building value for shareholders, partners, employees and customers. We are confident that our experience in China coupled with TA’s proven success investing in financial technology companies will form a valuable combination in accelerating the growth of YeePay.”
According to iResearch, the third-party payment industry in China has grown significantly in recent years with a compound annual growth rate (CAGR) of 54.1% between 2011 and 2013, and a forecast CAGR of 40.1% between 2013 and 2017. Total transaction volume was $3.2 trillion in 2013 and is expected to reach $12.4 trillion by 2017.
“Key drivers in the third-party payment industry in China include growth in the issuance of bank and credit cards, increased consumer spending, growth in online and mobile payments, and government promotion of non-cash payments,” said Naveen Wadhera, Director and Co-Head of Asia at TA Associates Asia Pacific Ltd. “It is estimated that only 10 percent of small and medium-size businesses in China have a point of sale payment solution, so we expect penetration of that offline market will also drive industry growth. This continued digitalization of payments should prove highly beneficial for YeePay.”
YeePay joins TA Associates’ other current payment processing investments, including BillDesk (IndiaIdeas.com) in India and BluePay Processing in the U.S. YeePay also joins TA’s other current and past investments in Asia, including Aicent, BillDesk (IndiaIdeas.com), Dr Lal PathLabs, Fractal Analytics, Forgame Holdings, Idea Cellular, Micromax Informatics, Nintex, Rategain, SpeedCast together with its six associated acquisitions, and Tega Industries.