China has, perhaps, the world's worst working capital problems
Chinese fintechs providing invoice financing have enormous potential in China.
Hong Kong invoice financing fintech Qupital has locked up $2 million in a seed funding round, led by Chinese internet giant Alibaba.
The funds, the company says, will be used to improve its website and on marketing.
“We are happy to see Qupital continue to help other entrepreneurs in Hong Kong and it is an exciting time to be part of the growing FinTech ecosystem,” Cindy Chow, Executive Director at Alibaba Entrepreneurs Fund, told Forbes.
Qupital runs a two-way marketplace for invoices. Its platform allows businesses to sell their invoices to a pool of accredited investors, who are then required to bid competitively and thereby offer sellers the lowest rate.
The company’s successful seed funding is exciting because of the huge potential invoice financing has in China.
China’s receivables market is massive and worth an estimated $3 trillion. According to Bloomberg, it takes on average 83 days for a Chinese firm to collect cash - almost twice as long as other developing countries.
There have been reports in the country’s north of companies waiting 3 years to receive payment for sales.
For investors, the attraction is exposure to an asset class - receivables - which, in Hong Kong, were only available to large financial institutions until very recently.