Kuala Lumpur, 23rd April 2018 – Soft Space Sdn. Bhd., one of Asia’s leading FinTech players, today announced the closing of a Series B investment with Sumitomo Mitsui Card Company (SMCC) – one of a subsidiary of Sumitomo Mitsui Financial Group (SMFG), which is one of the largest financial groups in Japan. 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.
“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.” said Ken Kubo, President of Sumitomo Mitsui Card Company. “Moving forward, we will collaborate with Soft Space and create market-driven solutions that will boost both our businesses to new heights.”
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. However, this policy has recently changed and Japan is experiencing more foreign investment.
SMCC has in the past invested in two US-based FinTech companies – Square Inc. and Stripe Inc. This makes SMCC’s investment in Soft Space the world’s first outside of Japan and the United States, and the first Malaysian-based FinTech company that SMCC has invested in South East Asia (SEA).
“To attain this distinction as the first company SMCC has invested in outside of Japan and the United States is a real privilege for us at Soft Space,” said Joel Tay, CEO of Soft Space. “We are humbled by this and will leverage this partnership to the fullest by delivering innovative FinTech solutions to our Japanese partners to the best of our abilities.”
“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.