Chinese internet giant Tencent has acquired a 5 per cent stake in Australian buy now, pay later service Afterpay. 

Announced on Friday, the deal will support Afterpay’s global growth strategy, following its expansion into the US and UK markets. 

The stake was acquired from late March through April for around A$300 million, but Reuters reports, Tencent’s shareholding in the Australian firm was worth about A$390 million (US$251.55 million), based on Afterpay shares’ closing level on Friday. 

The Hong Kong-listed conglomerate owns social and payments platform WeChat as well as gaming and cloud computing assets. Tencent’s Weixin Pay service is a mobile payments platform that facilitates an average of 1 billion commercial transactions a day. 

“We feel very privileged to welcome Tencent as a substantial shareholder in our business. Being able to attract a strategic investor of this calibre is extremely rewarding and is a testament to our team and the strength of our differentiated business model,” Afterpay co-founders Nick Molnar and Anthony Eisen said in a joint statement. 

“Tencent’s investment provides us with the opportunity to learn from one of the world’s most successful digital platform businesses. To be able to tap into Tencent’s vast experience and network is valuable, as in the potential to collaborate in areas such as technology, geographic expansion and future payments options on the Afterpay platform.” 

James Mitchell, chief strategy officer of Tencent commented, “Afterpay’s approach stands out to us not just for its attractive business model characteristics, but also because its service aligns so well with consumer trends we see developing globally in terms of Afterpay’s customer-centric, interest-free approach as well as its integrated retail presence and ability to add significant vault for its merchant base. We look forward to a deep and long-term business partnership between Tencent and Afterpay.”

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