Singapore's payment start-up Pace to expand to Japan, Korea, Taiwan

24, Nov. 2021

Pace works with stores to offer promotions such as this one for the month for December 2021. (Photo: Pace)
Pace works with stores to offer promotions such as this one for the month for December 2021. (Photo: Pace)

By Celine Chen

SINGAPORE, NNA - Pace, a Singapore-based fintech start-up that offers a 'Buy Now Pay Later' or BNPL service, has raised $40 million in a Series A round to fund its expansion to Japan, South Korea and Taiwan.

Investors that participated include Singapore's UOB Venture Management, Marubeni Ventures of Japan, Atinum Partners of South Korea, Taipei-based AppWorks, and some family offices from Japan and Indonesia.

Earlier investors like Vertex Ventures Southeast Asia, Alpha JWC, and Genesis Alternative Ventures also took part.

Launched in January this year, the start-up has seen hyper-growth rather quickly after collaborating with international retail chains to use its BNPL service at on-site locations as well as online.

The new funding will go towards expanding technology, operations, and business development, with a target to hit a gross merchandise value run rate of $1 billion in 2022, said Pace in a press release on Nov. 21. It also aims to grow its user base by 25 times over the next 12 months.

Pace currently operates in Singapore, Malaysia, Hong Kong, and Thailand.

Turochas 'T' Fuad, founder and CEO of Pace, said: "This investment from some of the most successful and established investors signals confidence that Pace is a leading BNPL player in Asia. The region is expected to become the world's fastest-growing BNPL market, and this funding supports Pace in achieving its mission of democratizing financial services for all, by helping us pave our expansion into Japan, Korea, and China Taiwan.''

Paul Ng, executive director at UOB Venture Management, said, "We are impressed by Pace and the founder's clear vision, rapid growth, and experience not only in BNPL payments but in its progress in creating financial inclusion, and remain confident in their ability to revolutionize financial services. With this funding, we are excited to join them on their journey forward."

On how the financial services industry in Asia is shifting dynamically, Joon Oh, executive director of Atinum Partners, noted that Pace has managed to tap into local consumer curves to establish itself as a dominant player with its clear vision.

"Through this funding, we hope for Pace to continue empowering more people across Asia with innovative fintech services," Joon Oh added.

Following the latest investment round, Pace is believed to be the fastest growing multi-territory BNPL player from Singapore.

To date, Pace has more than 3,000 points-of-sale across its regional markets. It managed to increase overall sales up to 25 percent by leveraging local customer insights, while encouraging repeat purchases from its fast-growing pool of users, said the company.

Chua Joo Hock, managing partner of Vertex Ventures SEA and India, added: "Since leading its seed round, we have seen Pace grow by leaps and bounds. It has demonstrated excellence in expanding its users and merchants significantly to become a leading regional BNPL player. BNPL will become more prevalent in Asia, and our continuing funding in Pace reaffirms our belief in the strong execution capability of T and his team, and the hyper-growth prospects of the company."

Pace said it has successfully grown its overseas operations by working closely with regulators and integrating frequently used in-market payment methods in order to work seamlessly with merchants and shoppers. It will continue to adopt a hyperlocal approach as it expands to new markets.

Currently, Pace allows consumers to split their bills into three interest-free payments stretched over 60 days through an omnichannel experience.

Pace aims to promote financial inclusion for consumers in emerging markets in the region, by helping them take control of their spending on their terms, while helping merchants meet increasing consumer demand for BNPL payment and boost sales.

The flexible payment method has become increasingly popular worldwide, including many countries in the Asian region, following the start of the pandemic-induced online-shopping boom last year.

The global BNPL market size is expected to reach $20.40 billion by 2028, registering a compound growth rate of 22.4 percent from 2021 to 2028, said Research and Markets.

The COVID-19 pandemic is expected to have a positive impact on the market as it is considered a convenient payment method for smaller purchases when shopping online.

"The increasing popularity of BNPL platforms during the COVID-19 pandemic, coupled with the growth of the e-commerce industry, is expected to create growth opportunities for the market over the forecast period," said Research and Markets.

Shoppers prefer buying products that allow them to make payments in installments without charging them any interest.

"As a result, merchants can increase their conversion rates with BNPL services. These services also offer other benefits to merchants, such as full and upfront payments, higher average transaction value, larger customer base, and repeat purchases, among others," added the research firm.

Millennials are widely adopting BNPL services for paying for clothing in installments, it noted, adding that the fashion and garment segment is expected to register the highest growth over the forecast period.