Finstar Financial Group, a Russia-based private equity firm focused on financial technology, will invest $50 million in an existing portfolio company as part of a Southeast Asian mobile consumer lending agenda.
The capital will support operations by Digital Finance International (DFI), which provides unsecured financing to customers in emerging markets. It represents the first commitment in a five-year $150 million Asia Pacific investment program announced by Finstar earlier this year.
“The rapid growth in consumer demand across the emerging markets offers exciting opportunities for fintech-enabled disruptive lending technologies,” Oleg Boyko, Finstar’s executive chairman and founder, said in a statement. “DFI’s strong proposition, high-quality management, and excellent governance all reflect Finstar’s key principles and foundations. Our outlook is one of optimism and excitement, and we’re confident in seeing our investment deliver significant value for the long term, not just for Finstar but for billions of consumers worldwide.”
Founded in 1996, Finstar focuses on financial inclusion investments in underbanked populations across Asia, the US, Latin America, Europe and states of the former Soviet Union. It offers acceleration and incubation services through a program known as FinstarLabs, and claims more than $2 billion of assets under management.
Finstar has identified Asia as a critical part of its global strategy, citing scalability potential that matches well with Europe and the US, as well as headwinds related to the region’s cultural and bureaucratic complexities. The GP’s Asia program is expected to include 3-6 deals per year with deployments ranging from $500,000 to $30 million.
Private equity funds specialized in fintech have become increasingly active in recent months in an attempt to exploit overlaps in the sector’s various target verticals. In Southeast Asia, the momentum has coincided with rapid financial industry digitization, with a recent report by Google and Temasek Holdings projecting that the region’s online economy will be worth $200 billion by 2025.