Technology

Remittances and the process of transferring money between people and organizations continues to be a huge business — worth some $613 billion globally, according to the latest figures from the World Bank. Now one of the bigger players in the world of B2B payments is itself changing hands. EQT — the investment and private equity firm — is buying Banking Circle from its previous majority owner DenmarkSaxo Bank. A Banking Circle spokesperson told TechCrunch that the deal is valued at 2 billion Danish kroner, or $300 million.

Banking Circleco-founders and co-CEOs, Anders la Cour and Laust Bertelsen, will stay on and keep leading the company. EQT said that it plans to invest in the business to expand its product offerings and also help it move into more geographies. For now it will stay focused on B2B although it has also some sights on extending to consumer by way of its clients (in other words, B2B2C).

Banking Circle currently processes about €60 billion in payments annually for its clients, which include banks, card entities, and payment gateways that choose. It also has partnerships with a number of them and other banks to provide direct clearing access, making the payments faster and cheaper.

La Cour told TechCrunch that Banking Circle was essentially started under the wing of Saxo &because itvery hard to build this without the help of a major partner.& Similarly, now that it has grown, ittime to grow under a different structure with less ties to a single bank. &We see this as the right partner at the right time,& he said.

Banking Circle, he said, is ‘close to profitability& Ebitda-wise. &We&ll keep investing heavily over the next couple of years.&

EQT says it plans to invest more in the company itself, but italso going to be leveraging its holdings in other businesses, as well as its own platform that includes &deep TMT sector expertise, local presence and EQTglobal network of Industrial Advisors,& it said.

&We are excited to partner with EQT,& said the co-CEOs in a joint statement. &With their support, we will be ideally positioned to continue innovating to serve our customers even better and continue our rapid growth.&

Saxo Bankpayments division will also continue working with Banking Circle under its new owner.

&We are proud of Saxo Payments Banking Circledevelopment and growth. As investor and incubator, we have supported the company with our core competencies in foreign exchange as well as developing and managing global fintech solutions,& said Kim Fournais, founder and CEO of Saxo Bank, in a statement.&It is not an easy task to build fintech solutions that create value and are long-term sustainable, but the company has done what few succeed in.&

EQT is a prolific investor in tech startups, as well as an acquirer of them. Just last week, its private equity division EQT Partners picked up the commercial Linux distributor Suse from Micro Focus for $2.5 billion. EQT Ventures, which is also partly financing this deal, describes itself as &half VC, half startup& and aims to put in more than just money to the companies that it backs or acquires.

In the case of Banking Circle, the company is tapping into a huge market that spans developed and emerging markets, as well as individuals and businesses, and taps into new tech innovations to speed up the process, make it less costly and more easy to do, and overall disrupt those who have traditionally been the gatekeepers for remittances — the Western Unions and large banks of the world.

Itnot the only one trying to do so, of course: the focus on using new digital rails for payments, and instruments like mobile phones and the internet to facilitate money transfers means that a number of startups have entered the fray. Some of the biggest that started out initially working with individuals, such as TransferWise, are now also building up substantial B2B businesses, too. This is one reason why EQT, with an eye on smaller startups, saw an opportunity to invest in, and supercharge, Banking Circle.

&We have followed Banking Circle for several years and are impressed by the companymanagement team and unique innovation capabilities,&says Mads Ditlevsen, Responsible Deal Partner and Partner at EQT Partners, Investment Advisor to the majority owner EQT VIII. &Saxo Bank and Banking Circlemanagement team have built an innovative, secure, and highly automated platform to make competitive, faster, and more transparent payments across borders. EQT is looking forward to supporting Banking Circle and the management team on their continued growth journey and in building a leadingglobal payments infrastructure player.&

&We&re excited to partner with the entrepreneurs behind Banking Circle and support them in building the next generation infrastructure for cross-border payments,& says Hjalmar Winbladh, partner at EQT Partners who has a prolific record as a founder himself, having started VoIP company Rebtel, the picture messaging pioneer SendIt that was eventually acquired by Microsoft, and the social shopping and rewards app Wrapp. &Cross-border payments is a large and rapidly growing market dominated by traditional players. Banking Circle has built a disruptive solution with a strong value proposition. The customer feedback is excellent and the companytraction is evident looking at the triple digit growth of the business.&

The deal is expected to close in Q4.

Fresh from Spotifyunique direct listing in the U.S., another huge streaming service is about to follow suit and go public in America.

Tencent Music Entertainment (TME) has nothing like the global profile of Spotify, but Chinatop streaming service is heading for the U.S. public markets according to a filing made this weekend by parent company Tencent, the $500 billion Chinese internet giant which plans to spin the music business out.

At this point, specific financial details around the listing aren&t being released, but past reports have suggested that it could raise as much as $1 billion and give TME a valuation of $30 billion.That would be quite a jumpfrom its most recent $12 billion valuationand certainly not guaranteed given that others from China, including Xiaomi, has fallen short of ambitious IPO valuation targets.

But thereprecedent here sinceTencent made a similar move last year when it broke off China Literature, its digital books business unit, and listed it in Hong Kongwith some success. Hong Kong had also been mooted as a destination for TME, but the Tencent filing stated the firmintention to &spin-off by way of a separate listing… on a recognized stock exchange in the United States.&

While it seems unlikely that Tencent will follow Spotify and adopt a direct listing — which ditches with the conventional process of an IPO price and engaging banks — it may well call on its rival for pointers since they are both mutual investors.

The duoannounced an equity swap deal in December that could see themteam up on business in the future. At the time it was certainly a sign that both sides were getting into shape to go public, and TMEIPO would wrap that up.

ChinaXiaomi, the worldfifth biggest seller of smartphones, made an underwhelming public debut after it hit the Hong Kong Stock Exchange amid concerns around an ongoing trade war between the U.S. and China.

Media reports in the lead up to todaybell ringing suggested that eight-year-old Xiaomi was shooting for a valuation of as much as $100 billion. In the end, it had to settle for a more modest $54 billion valuation as it raised $4.7 billion from the IPO.

CEO Lei Jun acknowledged that &global capital markets are in constant flux& thanks to tensions between Beijing and the White House, which has seen trade tariffs levied on each side. However, Lei — one of Chinamost successful technology entrepreneurs — said that the situation doesn&t diminish his belief in his business.

&Although the macroeconomic conditions are far from ideal, we believe a great company can still rise to the challenge and distinguish itself,& he said in a speech at the listing ceremony.

Xiaomi enjoyed an understated debut. The stock opened at HK$16.60, below the list price ofHK$17, and it quickly fell toHK$16 before later recovering. Its closing share price for the first day of trading was HK$16.78.

Data via Hong Kong Stock Exchange

Aside from global market concerns, investors are said to have been unsure of Xiaomiecosystem story. The company pitches itself as going beyond devices to offer internet services, such as video streaming, although it has yet to see significant revenue in the services category.

Prior to listing, Xiaomi pledged to keep its gross margin to just five percent to ensure that its products are well priced for consumers, but that requires the company to find other ways to monetize and thatwhere the services play is aimed. Xiaomi also offers a long-tail of products developed by third parties, such astech like smart speakers andnon-tech items that include bags and pens, which it sells directly to its consumer base using its e-commerce sites and ‘Mi& brand.

Finally, another core push is its international expansion plan.

China continues to account for the bulk of its revenue, although that is dropping.For 2017 sales, China represented 72 percent, but it had been 94 percent and 87 percent in 2015 and 2016, respectively. One market it has made significant progress in is India, where it was recently ranked the top smartphone sellerthanks to a strong brand.

However, itunclear how the firm has performed in other markets in Asia and whether it can succeed in Europe, where it has made a push in recent months. The U.S. market is another key challenge that Xiaomi has yet to find a solution for, despite Lei Jun and other executives claiming it&ll enter the country before the end of next year.

You can read more about the Xiaomi business and IPO plan in our review below:

Note: The original version of this article was updated to correct Xiaomivaluation and target valuation.