When speaking of Tencent people often think about its C2C mobile messaging platform WeChat, which has over 1 billion users, or WeChat Pay, its mobile payment platform that retail Chinese use to pay for anything and everything both in China and overseas, from paying for a taxi in Beijing to paying for luxury goods while shopping in Paris or New York.
Tencent, however, is more than just WeChat or WeChat Pay. Few people know that Tencent recently developed a 2B enterprise solution WeQChain using its blockchain technology TrustSQL.
Tencent bets big on blockchain
In late 2015, Tencent initiated its blockchain R&D. In 2017, it published its blockchain white paper V.1. In Oct. 2019, white paper V.2 was released. The blockchain infrastructure developed by Tencent is TrustSQL.
Tencent groups its blockchain practice and other Fintech products under FiT (Tencent Financial Technology)
Tencent identifies a fast-growing use case for its blockchain technology - supply chain finance for SMEs
We all know that China is a global factory. It is not only an assembly hub for global components but has a supply chain of big and small manufacturers that produce a myriad of components within China.
One of the biggest challenges facing Chinese small and medium suppliers is high costs and limited channels of financing for their manufacturing activities. Most of the Chinese banks avoid SMEs due to a lack of enough fixed assets to serve as collateral.
Ground-Breaking financial product “supply chain finance ABS (asset-backed securitization)” has emerged and gained traction in China. Different from traditional practices of financing, supply chain finance ABS relies on a larger enterprise’s account payables (suppliers’ account receivables) as the underlying cash source for supply chain finance asset securitization.
Linklogis and Tencent jointly developed WeQChain with TrustSQL
Tencent is both the financial and technology backer of the Chinese fintech unicorn - Linkologis.
Founded in February 2016 headquartered in Qianhai, Shenzhen, Guangdong Province, Linklogis is a technology solution provider of supply chain finance (SCF), offering financing to Chinese SME suppliers.
Linklogis has served more than 3000 suppliers through WeQChain, a (SCF) service platform jointly developed by Tencent and Linklogis using TrustSQL. Different from WeChat and WeChat Pay, two applications for 2C, WeQChain is a 2B enterprise solution connecting SME suppliers, larger enterprise buyers and financial institutions that provide financing to both suppliers and buyers.
Tencent and CITIC are the two largest shareholders in Linklogis. Because of it, Linklogis has a roster of high-profile investors.
Its Series C round closed in Oct. 2018 with a total raise of over $220M, led by GIC, the Singapore government’s sovereign wealth fund, joined by investors including Tencent, CITIC Capital, Loyal Valley Capital, Bertelsmann Asia Investment (BAI), GLP, China Merchants Venture, Skyworth Group, Fanhai Investment Group and Welight Capital.
Earlier this year, British multinational banking and financial services company Standard Chartered PLC announced to be the first foreign bank to invest in Linklogis’ C+ round. Standard Chartered completed its first transaction using WeQChain last year.
Back in 2016, Standard Chartered invested in Ripple.
KGA recently launched Blockchain Asia newsletter through "Substack".