Standard Chartered and Chinese fintech Linklogis will establish a new supply chain finance marketplace in Asia after inking a joint venture agreement.
The bank says the platform, to be called Olea, will bring together businesses looking for supply chain financing with “institutional investors seeking opportunities in an alternative asset class”.
Olea is planned to be operational by the end of 2021, subject to regulatory approval of the joint venture, according to Amelia Ng, who will become its CEO. Letitia Cha, Linklogis’ vice-chairperson and chief risk officer, will be deputy CEO.
In January last year Standard Chartered took an equity stake in Linklogis, listed on the Hong Kong stock exchange, after the two signed an agreement under which the fintech would help the London-headquartered lender grow and digitise its offering in China while enabling Linklogis to expand its technology globally.
The pair have global ambitions for Olea, which will be run from Singapore. “Given the headquarters’ proximity to Asia, as well as the region being the world’s largest manufacturing region, Olea will initially focus on Asia and expand its geographic focus as the business grows,” Ng tells GTR.
“By marrying Standard Chartered’s international trade and risk management expertise and unparalleled knowledge of Asia, Africa and the Middle East with Linklogis’ innovations in supply chain technology, Olea is uniquely positioned to reinvent trade finance and be a force for good,” she says in a separate statement.
“Olea aims to disrupt today’s trade finance model by matching suppliers’ financing needs with alternative liquidity from investors seeking a compelling asset class linked to the real economy.”
The new platform will also draw on Linklogis’ artificial intelligence and blockchain capabilities, according to the statement.
Asked to elaborate, Ng says the technologies will “enable the supply chain participants in our platform to gain trusted insight and transparency to their financing transactions, allowing investors to understand their risk and manage their portfolio with greater confidence”.
Standard Chartered offers supply chain financing in its own right in Asia, but Ng said Olea’s business model differs from banks’ because it will offer “alternative liquidity from investors”.
“Olea’s rigorous risk analytics and secure platform offers investors access to investment options for returns that align with their risk profiles,” the bank’s statement says.
Linklogis founder and CEO Charles Song says the company is China’s largest tech solution provider for supply chain finance. The fintech “can bring its top-notch operating experiences and industry-leading technologies into Olea”, he says. “We believe that the joint effort between the two firms can take the lead in operating a flexible, sustainable and scalable supply chain financing business proposition”.
Standard Chartered and Linklogis completed a joint deep-tier supply chain financing transaction in August 2019.
In July this year Linklogis was targeted by Valiant Varriors, a short seller group. It alleged the company had misled investors about its reliance on China’s stressed real estate sector and had debt-to-equity ratios far exceeding regulatory limits for factoring enterprises.
In response, Linklogis said the report contained “multiple misrepresentations, false allegations and obvious factual errors”, adding that its institutional investors had backed the company in the wake of the allegations.