China's Tencent backs Argentina mobile banking startup Uala

BUENOS AIRES (Reuters) - Chinese tech giant Tencent Holdings Ltd has invested in Argentine mobile banking service Uala, which also counts George Soros and Point72 Ventures LLC among its investors, the start-up’s founder said.

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Uala founder Pierpaolo Barbieri said the company planned to collaborate with the Chinese social media-to-gaming giant to further develop its app. He declined to disclose the amount of investment, but said it significantly raised Uala’s valuation.

Chinese tech firms have been ramping up their interest in Latin America, from ride-hailing company Didi Chuxing to telecoms firm Huawei and search engine Baidu Inc.

Tencent, one of Asia’s most valuable listed companies, announced last year it would boost investments in a number of “key areas” including digital payment, where its service jostles with rival Alipay, backed by Alibaba Group Holding Ltd.

Tencent’s own messenger-to-payment app WeChat now has more than 1 billion users in China and has launched in-app services that compete with Apple and Google apps.

Tencent last year invested $180 million in Brazilian financial technology company Nu Pagamentos SA.

“The idea is that it’s not just money. It’s about learning from their experience in China and in other Asian markets to inform our Latin America strategy,” Barbieri told Reuters in a phone interview.

He said Tencent had approached his firm and that he had traveled to China to meet with Tencent’s senior team in recent months. He added the investment would help accelerate the company’s growth plans.

Uala offers prepaid Mastercards, bill payment, metro card top-up and digital payments for users in Argentina.

Argentine startups face regulatory hurdles in South America’s second largest economy, but the country has spawned some of the region’s most successful tech startups, including U.S.-listed online marketplace MercadoLibre Inc and Internet travel agent Corp.

The country, which has a large unbanked population, is also seeing a boom in digital finance from start-ups like Uala to a new wave of online banks competing with more traditional lenders.

Reporting by Cassandra Garrison; Editing by David Gregorio