Business / Technology

Circle in cross-border move

By Ma Si (China Daily) Updated: 2016-06-24 09:31

Circle Internet Financial, a US mobile payment company, has raised $60 million from investors and launched an independent China venture to tap into local consumers' growing purchasing power.

The latest round of funding is led by Beijing-based tech investment fund IDG Capital Partners. Other investors include Baidu Inc and Breyer Capital, a global venture capital firm.

The three-year-old startup aims to offer instant and free-of-charge cross-border money transfer services by leveraging the Bitcoin blockchain technology.

After obtaining a regulatory license and finding local banking partners, Circle will formally enter into China's mobile payment market, which is now dominated by internet heavyweights Alibaba Group Holding Ltd and Tencent Holdings Ltd.

Jeremy Allaire, CEO of Circle, said on Thursday: "Instead of competing directly with local players, we will focus on cross-border opportunities as Chinese consumers play an increasingly bigger role in the global economy."

He said the new cash will primarily go to non-China operations, as the company has separately raised several million yuan as a seed funding for Circle China.

Circle claims it can allow Chinese consumers to send money in renminbi instantly and for free to someone in another country, who can then cash out in their own currencies. Last year, Circle raised $50 million in a funding round co-led by Goldman Sachs Group Inc and IDG Capital.

"Compared with their Western counterparts, Chinese buyers are far comfortable with mobile payment tools, which offers a big opportunity for us," Allaire said, adding the company has entered into advanced discussions with potential Chinese banking partners.

The move comes as Chinese consumers have a growing desire for overseas products and global consultancy Accenture Plc predicts that more than 70 percent of Chinese will become middle class by 2030.

Ma Tao, a senior analyst at Beijing-based internet consultancy Analysys International, said it may take a long time before Circle gets a regulatory license given that the application of the blockchain technology is still in quite early days. Also it would be difficult to lure consumers away from Tencent and Alibaba.

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