Chinese tech giant Tencent has reportedly decided to cash in its stake in UK neobank Tide as part of an overall retreat from its global investments strategy.
Tencent has reportedly offloaded its shares to an unidentified buyer or group of buyers.
Tencent, known for its comprehensive Chinese app WeChat, has reportedly been a fairly active investor during the past 10 years, consistently obtaining stakes in various startups across China as well as Western markets.
But its investment pace has considerably slowed down recently, presumably due to market uncertainties and the possibility of a looming recession.
As mentioned in a company filing, Tencent Cloud Computing, which is the cloud services unit of Tencent, has now reduced its 14% stake in Tide to zero this past April.
The identity of the latest stakeholder is clear at the time of writing, but earlier, Tide had reportedly carried out a secondary share sale enabling early backers to liquidate any holdings.
It’s worth noting that these types of secondary sales are now quite common as tech startups decide to stay private for longer timeframes.
For instance, Revolut shaed with its workers about an opportunity to sell off shares at a valuation of $45 billion.
Established back in 2015, Tide provides banking and financial services to around 575,000 small and medium enterprises operating the United Kingdom, India, as well as German markets.
The firm has obtained funding from various investors such as Apax Partners and Japan’s SBI Group.
Tencent’s investment in Tide has reportedly been part of a wider business strategy to enter the UK fintech space with earlier investments in firms such as Previse and Monzo.
Although the UK Fintech sector has been growing steadily over the years, the current business environment may seem unstable due to socioeconomic uncertainties and political issues across the globe. It’s likely that when the market conditions improve, a generally positive investor sentiment should emerge. At that time, international firms and investors may feel more confident in acquiring strategic positions in markets across the world.