Canadian challenger bank Neo Financial Technologies' discounted fundraising round earlier this month included a mystery Chinese investor that has been revealed to have been Chinese tech giant Tencent Holdings (HKG:0700, OTC:TCEHY)
Just over two weeks ago, the Calgary, Winnipeg and Toronto-based online bank said it had secured C$360 million in a fundraising round to expand its suite of financial services products.
Neo raised C$110 million via a share issue and C$250 million from debt in the funding round, in which existing investors such as Peter Thiel's Valar Ventures and Peter Thomson's Thomvest invested alongside newcomers.
The bank shared the names of most of the investors but did not reveal the lead investor, which website The Logic said was "a single buyer based in China".
Today, The Globe and Mail identified Tencent as that company, having committed to buying US$50 million of shares, according to a term sheet from the deal.
Neo, which reached US$100 million of annual revenue in April and expects to break even at the operating level in 2025, according to its prospectus, was forced to issue its new shares at US$4.26 or US$5.33 depending on two types of preference shares in this funding round, down from the US$16.01 share price for shares sold in 2022.
The company has told tech media that Neo did not have approval to name the investor.
Tencent's investments outside of China include several digital banks, including the UK's Monzo and Tide, France’s Qonto and Germany's N26.