A short update on yet another titanic equity investment within China’s P2P space.
Consumer lending platform Wanglibao has raised $40m in a series B fundraise. The funds were contributed by Shenzhen-listed Hongli Opto-Electronic Co., Ltd. Wanglibao only launched in August of 2014, but had already raised a significant $10m in a pre-launch Series A round led by IDG Capital Partners in February of that same year. From the available stats, we may discern that Wanglibao has over 250,000 registered investors to date.
This is not the first time that we’ve seen a Chinese P2P platform build up tremendous amounts of lending volume, and indeed venture capital investment, within only a year or two of launching. Last month Lufax raised $485m in a round that valued the company at a little less than $10 billion. The platform launched in 2012. Only a few days after the Lufax news broke, Jimubox (which launched in mid 2013) closed a Series C round worth $84m.
This tide of VC interest is being driven primarily by the colossal transactional flows that are washing through the Chinese P2P space. An article in ShanghaiDaily.com suggested that the sector matched 55.1 billion yuan ($8.9bn) in April, a growth multiple of 2.7 from the previous year.
But the risks persist. Online Lending House estimates that there were 52 fraudulent platforms in operation in April, down from 56 in March. Fortunately, a set of dedicated P2P regulations are inbound – and will reportedly arrive within the month.
Ning Tang, CEO of CreditEase – the largest P2P lender in the world, summarised the present situation:
“In terms of macro conditions, the People’s Bank of China, the China Banking Regulatory Commission, and local Ministry of Finance offices have all been very clear on the general direction. Even the State Council has noted the need to develop inclusive finance and promote internet finance. “Mass entrepreneurship and innovation” cannot be accomplished without support from inclusive finance. Internet finance and P2P lending is a very important driver, so the outlook is good on the macro level.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.