The online and P2P lending sector in China ended 2015 on a high with massive growth taking place in the industry. Despite falling equity prices in China and worries that the government may enact guidelines to marketplace lending that will restrict the growth of the industry, exuberance for Chinese lenders appears to be continuing so far this year.
Closing one of the largest Series B funding rounds in the world, WeLab, operator of Wolaidai, a Chinese mobile lending platform, and WeLend.hk, a Hong Kong online lender, has announced that it has raised $160 million. The deal was led by Malaysian sovereign wealth fund Khazanah Nasional Berhad and included investments from ING Bank and state-owned Guangdong Technology Financial Group (GTFG). For WeLab, the funding follows a $20 million Series A round that was raised in January 2015.
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According to statistics provided by WeLab, the firm saw loan transactions grow 10x during 2015. Since launching their lending operating in 2014, the firm has transacted a total of $1.37 billion (RMB 9 billion) in loans and signed up 2.5 million customers. WeLab also stated that delinquency rates of loans of over 30 days past due are below 1%, lower than the 1.21% figure for credit card debt in the country which was reported by the Peoples Bank of China in July 2015.
For ING, the deal is notable in that it follows a similar stake that the bank took in US based online lender Kabbage that was announced in October. While online lenders compete with traditional banks for borrower customers, there are natural synergies that exist between the two groups. They include the referral of customers that don’t meet a bank’s borrowing requirements to online lenders, and the licensing of lending technology for banks to improve their own lending process. In addition, banks have also been partners by providing capital to online lenders to lend to their customers.
With regard to their current stake, Ralph Hamers, CEO of ING, cited potential partnerships between ING and WeLab as he stated: “The stake we have taken in WeLab and the other investments prove that we are determined to transform banking to further improve the customer experience. We will look at the possibilities of starting a partnership with WeLab in ING markets.”