World’s largest money transfer organization, Western Union has bought a 15 percent stake in stc pay, a digital secure wallet service owned by Saudi Arabia’s STC Group for $200 million.
Kingdom’s largest telecoms operator Saudi Telecom Company (STC) is expected to utilize the income from the purchase, which values the service at $1.3 billion, to support its capital expenditures and long-term expansion plans.
Mr. Mohammed bin Khalid Abdullah Al Faisal, STC Group’s Chairman stated that the investment made by one of the largest players in the global economic landscape reflected the company’s position as a “digital enabler”.
The STC Group Chairman observed that the deal made stc pay the first “unicorn in Saudi Arabia and the first fintech unicorn in the Middle East”.
‘Unicorn’ is a term that is used to define a private company, mostly a startup which has earned a valuation of $1 billion or more.
Over the last several years, the Saudi Arabian government has been pushing for revenue streams to support the economy which are not dependent on the Kingdom’s oil riches. The government has also been pushing to reduce the dependence on cash in an attempt to modernize the Saudi economy.
Last month, STC Group had reportedly hired banks to facilitate a potential initial sale of shares (IPO) in Solutions by STC, the group’s product and services development subsidiary.
Launched in 2018, stc pay is the first Saudi Arabian Monetary Authority (SAMA)-licensed fintech company which has more than 4.5 million users.