Tencent Launches $3.4M WeChat Fund for South African Startups
Tencent has launched a $3.5 million seed-stage fund to invest in small businesses and startups in South Africa, targeting companies that use its chat application, WeChat, to conduct business. Tech strategy firm Batstone will jointly manage the fund, sourcing startups and managing deal flow.
The international expansion into the African continent comes less than one month after Tencent opened up its mobile payments service to overseas transactions, including launch of the South Africa WeChat mobile wallet in partnership with Standard Bank — the first launch of its kind outside of China. The service has allowed WeChat users in South Africa to make P2P transfers, pay for services such as data and electricity, and make in-store payments by scanning QR codes – much as consumers do in China.
South African startups selected for investment by Tencent can expect to receive direct access to the China market through WeChat. They will also receive support from Tencent in the form of technical integration through channels such as Nasper, South Africa’s largest Internet and media group and an early backer of Tencent. Additionally, Batstone will provide strategic consulting services to help the companies grow.
Today, WeChat boasts roughly 600 million users worldwide, of which about 200 million have attached credit cards to their accounts. Though the bulk of these users are in China, messaging apps are gaining traction in countries such as South Africa, which boast a continued increase in smartphone users. The fact that Tencent has chosen to establish the first fund of this kind in South Africa reflects a bullishness about the market’s continued growth, and its related cross-border mobile commerce opportunities.
