Hong Kong's 8 Securities acquired by US player

8 Securities, founded in 2012, previously counted Velocity Capital, Route 66, Leitmotiv Private Equity and Nomura Asset Management as investors. Its most recent funding round was a $25 million commitment from Nomura Asset Management. The financial terms of the SoFi deal were not disclosed, but the company confirmed the acquisition on its website 

8 Securities was founded by Mikaal Abdulla, the former head of Asia for online brokerage E-Trade, and Mathias Helleu, a colleague at the same firm. It runs a mobile-first platform offering stock trading solutions chiefly targeting millennials in developed Asian markets like Hong Kong, Singapore and Japan. Customers can purchase stocks, exchange-traded funds and other financial products listed on the Hong Kong and US exchanges. A robo-advisory service also helps them manage recurring investment and auto-investment strategies.

8 Securities claims to be the only app that offers commission-free trades – excluding third-party administrative fees – in Hong Kong. Much like its peers, it acts as a merchant and collects payment for order flows contributed to the trading divisions of banks and other financial institutions.

The acquisition is expected to lead to the introduction of newer types of financial services for 8 Securities customers and would also allow US customers to access Hong Kong-based brokerage options. Apart from stock trading, SoFi also offers users in the US payment, lending, and refinancing solutions for home and education loans. SoFi says that it sees rising interest among local customers for investment opportunities in Asia.

“What we’ve seen is this unprecedented and counterintuitive trend of people wanting to invest more [during the coronavirus pandemic]. Our desire to go international reflects the desire of young people and new investors to invest in US markets. 8 Securities in Hong Kong focuses on a very large gateway to the Asian market for financial services, and it’s a product that we know Asians want,” Anthony Noto, CEO of SoFi told CNBC. 

8 Securities said in a letter that the app would rebrand as the Hong Kong version of the SoFi app. Customers would be able to purchase fractional shares and carry out margin trading, or the use of leverage to increase the value of a given trade. Earlier in the month, SoFi, which is backed by VC investors like SoftBank, Third Point Ventures and Silver Lake Partners, acquired Galileo, a financial technology infrastructure provider for $1.2 billion. Galileo partners with fintech companies including RobinHood, Revolut, and Chime. 

A number of similar VC-backed apps have emerged in Hong Kong in recent years, including Kristal.AI, which raised $6 million in a Series A funding round led by India’s Chiratae Ventures earlier this year. Meanwhile, local banks are offering online and app-based stock trading options alongside traditional brokerages. 

Since 2014, select brokers and clearing houses have also been given permission by Chinese authorities to facilitate retail investment with certain restrictions from Hong Kong-based investors in various Chinese stocks.

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• Topics
• Greater China
• Technology
• Trade sale
• Hong Kong (China)
• Fintech
• Velocity Partners
• Leitmotiv Private Equity