Tag: super app

  • TikTok steps up its fintech foray 

    TikTok steps up its fintech foray 

    Chinese social media giant TikTok is borrowing a page out of the book of Alibaba and Tencent with its push into digital financial services. The ByteDance-owned company has super app ambitions. 

    Fintech is a logical progression for the massively popular short video app, which generated an estimated US$23 billion in annual revenue in 2024. It is the top-earning global app, driven by advertising, in-app purchases (coins/gifts), and rapid growth in TikTok Shop. 

    However, the ByteDance-owned company is highly dependent on advertising for revenue. The Business of Apps estimates the company makes 77% of its revenue from advertising, with the rest coming from commerce and in-app purchases. Moving into digital financial services could help it diversify revenue 

    Having observed the popularity of tools like Venmo and Cash App among younger users, TikTok believes it can become a key financial touchpoint for its massive digitally native Gen Z user base. This demographic already spends so much time online (and specifically in the TikTok app) that persuading them to use it for payments and other financial services should not be difficult.

    Yet in TikTok’s home market of China (where it is known as Douyin and operates under very different rules than overseas), Alipay and WeChat Pay have an effective payments duopoly. Their ecosystems are so comprehensive and embedded into everyday life in China that no competitors can easily build market share. 

    Additionally, since late 2020, Chinese regulators have tightened restrictions on fintech, broadly targeting the market dominance of big tech firms. This crackdown, which included putting Ant Group’s IPO on ice, put an end to the Chinese fintech boom and forced ByteDance to backtrack on plans to offer a wide array of financial services to Chinese consumers. 

    But in some markets outside of China, TikTok has strong potential as a provider of digital financial services. To that end, according to Reuters, the firm is planning to apply for two financial licenses in Brazil, where it has about 91 million users. Brazil is a promising market for fintech startups and is home to Nubank, one of the largest digital banks on the planet.

    The licenses are for electronic money and direct credit. The former license would allow TikTok to offer digital wallets and prepaid accounts. Users would be able to hold cash balances, receive funds (such as creator payouts), and make payments directly within the app. The latter  This would permit TikTok to act as a lender, using its own capital to offer loans to its users. While it could not take public deposits like a traditional bank, it could facilitate credit for e-commerce purchases or bridge borrowers with other lenders.

    Further, TikTok is reportedly looking to integrate Pix, Brazil’s highly popular instant payment system, directly into its interface to streamline social commerce and person-to-person (P2P) transfers. 

    What may augur well for TikTok’s fintech aspirations in Brazil is that it has already demonstrated a long-term commitment to the country. In late 2025, ByteDance said it would invest more than R$200 billion (US$37.7 billion) in a data center in Brazil, its first such facility in Latin America. 

    Before its push into Brazil’s financial services market, TikTok tried to enter the Indonesian e-commerce and payments markets in 2023. However, it was tripped up by regulatory obstacles. The Indonesian government implemented a regulation forcing a split between social media and e-commerce platforms, requiring a separate app for transactions. The rise of TikTok Shop was perceived as a threat to traditional, offline brick-and-mortar retail markets, such as Tanah Abang in Jakarta. 

    To avoid losing its operating license in one of its largest markets, TikTok was forced to halt its integrated e-commerce services and restructure its operations. Ultimately, the disruption forced TikTok to pivot and rethink its Indonesian strategy to comply with localization policies and improve relations with local businesses.

  • Grab doubles down on fintech

    Grab doubles down on fintech

    Singaporean super app Grab reached its first full year of profitability in 2025, posting US$200 million in net income. For a company once best known for burning cash in a race to the bottom against Uber and later GoTo, this is an important milestone—even if investors remain skittish: Grab’s stock has fallen 22% over the past year despite its improved financials.

    We have been following the Singapore-based firm closely ever since it launched a bid for a digital banking license in Singapore almost six years ago, and it has come a long way in terms of fintech capabilities. In the fourth quarter, Grab reported a 34% annual increase in financial services revenue to US$99 million, up from US$74 million a year earlier.

    Financial services revenue, while growing fast, is still just a fraction of the company’s overall business. Total group revenue for the fourth quarter was US$906 million, generated mostly by mobility and deliveries.

    Grab’s digital banking deposits in Singapore and Malaysia have reached US$1.6 billion, a modest increase over US$1.2 billion a year earlier. Perhaps more noteworthy is that its loan portfolio has doubled over the past year from US$1.18 billion from US$536 million at the end of 2024.

    Still, even by digital bank standards, this is not yet a significant lending business. Brazil’s Nubank, for instance, has a US$30.4 billion loan portfolio.

    Additionally, Grab’s fintech business remains unprofitable while facing stiff competition from both pure-play fintechs and incumbent banks in Southeast Asia. Despite having millions of users in its ecosystem, converting them into active, high-balance digital banking users has proven difficult for the Singaporean firm. Most of the company’s customers have low average balances because they are not switching over from their primary banking providers.

    At the same time, Singapore and Malaysia don’t have large underbanked populations that can allow digital banks to quickly build scale. More than 90% of adults in both countries have bank accounts, and most of the analysis claiming they have large “underbanked” populations stretches the definition of that term.

    Grab does own an 11% stake in Indonesia’s SuperBank, which is also backed by Emtek and Kakao Bank. Superbank went public on the Indonesia Stock Exchange in December, raising approximately US$168 million (Rp 2.79 trillion). The shares jumped 24% on their debut after being oversubscribed 318 times.

    Superbank offers Grab’s fintech business more significant growth potential than GXS Bank in Singapore and Malaysia because Indonesia actually has a large underbanked demographic. About 60% of Superbank users come from Grab’s ecosystem, allowing it to scale up quickly. The digital lender posted a profit of about US$5 million in the third quarter of 2025.

    The most ambitious fintech-related move by Grab in recent months is its acquisition of the U.S.-based investment app Stash Financial for US$425 million in a deal expected to close in the third quarter of 2026. Grab will acquire 50.1% of Stash in a mix of cash and stock at closing, with the remaining stake purchased over the next three years.

    The acquisition provides Grab with an established platform to enter the mass-market investment segment. Stash has over US$5 billion in assets under management and over one million subscribers.

    We don’t see Grab trying to bring its super app to the United States, but owning Stash will give it exposure to the U.S. market that it would not otherwise have.What we expect Grab to do, though, is try to leverage Stash’s capabilities in Southeast Asia to offer more tailored wealth management systems to its customers. It remains to be seen, however, how much traction this move will get. Grab’s communications about the acquisition emphasize Stash’s “AI-powered ”capabilities”—which could describe just about any digital wealth management service in existence today.