Chinese Fintech Lender Lufax May Delay IPO Amid Market Conditions: Bloomberg

China's dominant role in alternative finance and P2P lending may see changes.

Chinese fintech lender Lufax, which operates Lu.com and is known by its company name Shanghai Lujiazui International Financial Asset Exchange Co., may be delaying its Initial Public Offering (IPO) until next year, according to reports by Bloomberg.

In January, the company raised funds that valued it at $18.5 billion, and although the firm’s CEO Gregory Gibb said at that time how an IPO could be in the works this year, as per the Bloomberg article, he now thinks it may take more time amid market challenges and regulatory uncertainties.

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Lufax provides peer-to-peer (P2P) lending solutions as a financial services product and recently partnered with Saxo Bank, a leading online multi-asset brokerage firm, as highlighted by Finance Magnates after the news was announced just two days ago.

Regulatory squeeze

Changes in listing requirements that were enacted earlier this year in Shanghai also make it more difficult to for startups to go public as new rules require multiple years of profits and other criteria that may delay newly-emerging companies such as Lufax from an IPO.

Following the Ezubao ponzi scheme in December that alleged how the Chinese internet lender had defrauded nearly a million people of some $7.6 billion in China, as noted in the Bloomberg article, regulatory uncertainties for lenders and fintech firms have been brewing in the region, leading to recent action by Beijing.

Consolidation expected

Bloomberg coverage added that Mr. Gibb expects further consolidation, after he was quoted saying: “As the market goes through a slowdown and consolidation, those 2,000 or so players will probably drop to a couple hundred,” as per an interview with Bloomberg Television that was cited in the article.

A recent report titled Harnessing Potential cited that marketplace peer-to-peer consumer lending is the largest market segment in China with $52.44 billion lent, and is followed by marketplace peer-to-peer business lending which estimated to be $39.63 billion, and then real estate lending estimated at $5.51 billion.

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