Over the course of the past three weeks, Ant Financial, Lufax and JD Financial all released news of new rounds of funding. These are three of China’s largest fintech companies (according to enterprise value), and each have found success in their different paths. Below is some background on each company’s business and strategies.

Table 1 Latest Investments of China's Top 3 Fintech Companies

China’s largest fintech company Ant Financial raising RMB 10B Series B Investment

Not much detail about Ant Financial’s Series B Investment has been released, but major media outlets have revealed that the size is expected to be over RMB 10B.

Ant Financial is wholly owned subsidiary of China’s No. 1 ecommerce company Alibaba and is now China’s largest fintech company. The company’s enterprise value is undervalued at USD 45B as this estimate is based on its previous Series A Investment from July 2015. Ant Financial launched just 18 months ago, but its core business Alipay was the first online payment platform to take off in China in 2002. It grew with Alibaba and provided financial services to ecommerce users. Ant Financial partnered with other financial institutions to provide services in commercial banking, securities, fund and insurance, and the product line includes third-party payments, wealth management, short-term loans, online banking and a credit system. Ant Financial has been focusing on providing financial services to personal users and small and mid-size businesses. These customers are the reason Ant Financial has grown to become the largest fintech company in China, and it is looking to continue its steady growth in 2016.

Wealth management platform Lufax received USD 12.16B Series A Investment

Founded in September 2011, Lufax announced on Jan. 18, 2016, that it has raised USD 12.16B in a Series A Investment led by Bank of China Investment (Hong Kong), Guotai Junan Securities (Hong Kong) and CMBC International (Hong Kong). All investors are based in Hong Kong and wholly owned subsidiaries of major state-owned financial institutions. With state-owned institutions directly involved, Lufax will have an advantage in overcoming any regulatory hurdles and providing public equity products to Lufax investors.

According to Lufax’s performance report of 2015, the platform had 18 million registered uses and managed a total of RMB 1.6 trillion in investments. Of this RMB. 1.6 trillion, RMB 1 trillion was institutional investments between banks, trusts, insurance and security firms, and RMB 600 billion was personal investments on the P2P platform. Lufax is one of China’s first P2P platforms but is now trying to shift its focus to building an open platform for various wealth management products. With this new vision and structure of “an open platform”, Lufax has evolved into an online third-party sales platform for wealth management products, and most of the products will be supplied by partner financial institutions including commercial banks, trusts, security and insurance companies and other P2P platforms. In 2015, Lufax had already partnered with over 500 financial institutions and sold over 2000 public equities. To investors, Lufax will be the most inclusive online wealth management platform. For other institutions, Lufax will be a resource for additional marketing and technology support.

“Financial technology company” JD Financial raises RMB 6.65B Series B Investment

Sequoia, Harvest Capital and China Taiping Insurance led the RMB 6.65B Series B Investment for JD Financial. JD’s CEO Qiangdong Liu has stated that all paperwork has been completed and that the funds would be delivered by the end of June 2016.

In 2013, JD entered the financial market by providing financial services to its ecommerce users and provided many suppliers, shippers and consumers with much-needed funding. JD Financial provides individuals with personal loans, wealth management, a crowdfunding platform, and a payment tool called “JD Wallet.” Business users have access to supply chain financing, a payment tool, crowdfunding and wealth management. JD Financial also expanded to third-party payment services, securities and insurance business and developed several online platforms. For example, JD Crowdfunding is home to many successful technology projects. The platform helps projects connect with investors, such as reputable VC and PE firms, and provides a series of entrepreneurship services and seminars in marketing, business development, strategy, and product and technical support. JD’s CEO has been quoted saying, “JD Financial is a financial technology company.” Instead of focusing solely on fintech products, JD has made heavy investments in technology and infrastructure in big data, risk modeling and a credit system. JD is working to transition from ecommerce based supply chain financing and personal loans to building closed-loop product chains.

OTHER HEADLINES

Short-term financing-focused P2P platform Duanrong received RMB 390M Series B Investment

Founded in 2014, Duanrong is a P2P platform that provides short-term financing to personal and business borrowers. There offer secured loans, such as automobile and property mortgages, and unsecured credit loans to large enterprises. Like many other platforms, Duanrong maintains a reserve fund and compensates investors before collaterals are seized. The terms on all of Duanrong’s investment products on Duanrong are no longer than 6 months.

The RMB 390M Series B investment was invested solely by Furen Group, pharmaceutical company listed on the Shanghai Stock Exchange. Furen’s goal is to make Duanrong the first P2P platform listed on a Chinese stock market. Shortly after the investment, Duanrong stated that the funds would be used to develop new products in supply chain financing and agriculture.  

Hong Kong’s no. 1 P2P platform WeLab received RMB 1B Series B Investment

Founded in 2013, WeLab currently operates WeLend.hk, a P2P platform that provides personal loans in Hong Kong. WeLab aims to meet the financial needs of young borrowers, most of whom are students, office workers and farmers. Unlike many other student loan platforms that require the borrower’s presence at offline locations, WeLab completes all credit checks online. WeLab’s confidence in its secured risk management and access to personal users’ data have enabled the company to overlook in-person reviews. The platform uses a risk management system called WeDefend to obtain quick, thorough credit reviews and to mitigate credit risk. When it comes to data, WeLab collects behavioral habits from users’ mobile devices and payment data from third-party service providers for credit reviews.

The RMB 1B Series B Investment was led by Malaysian sovereign wealth fund Khazanah Nasional Berhad and followed by European banking corporation ING and Guangdong province SOE Yuejin Group.

Rent financing-focused P2P platform Fangsiling received RMB 200M investment

It is common practice for property owners to require renters to pay at least 3 months’ rent up front. Renters often struggle with the large upfront payments and need financial assistance. Fangsiling is a P2P platform focused on providing college students and young office workers with financing their apartment rent. Because renters pay their monthly rent directly through the platform, Fangsiling also benefits property owners by enabling them to receive rent in a more timely manner via online payment.

Fangsiling announced that the RMB 200M investment was led by 5i5j.com, one of China’s leading online rental agents.