Chinese rural-focused financing platform gets $47m
Shenma Finance, an online platform that provides vehicle financing to China’s rural population, has received RMB300 million ($47.2 million) in Series C funding led by domestic financial technology player Tongbanjie Group, China Growth Capital, and Hina Group.
Additional commitments came from CreditEase and ChinaEquity Group. Shenma previously received an undisclosed sum in Series A funding in 2015 and a RMB100 million Series B round the following year. Frees Fund led the Series A while Shunwei Capital and Northern Light Venture Capital led the Series B, with Frees Fund re-upping. ChinaEquity subsequently provided RMB100 million in an extended Series B round, according to a Shunwei statement.
Founded in 2015, Shenma claims to serve 800 million farmers through a network that covers 31 municipalities, provinces and regions, 2,600 counties, and tens of thousands of townships across China. It works with 40,000 offline merchants, including the country’s largest two-wheel electric vehicle and motorcycle manufacturers.
More recently, the company has expanded into additional verticals – such as household appliances – with a view to tapping into the broader rural consumption upgrade opportunity. However, Shenma CEO Rui Ning stressed that the company remains focused on consolidating its position in transportation by integrating and extending its financing channels as well as leveraging an anticipated increase in demand for four-wheel vehicles.
Wei Wang, a partner at Hina Group, noted that the rural transportation market is large and stable, but the penetration rate of financial services is very low. “Shenma has become the market leader in terms of financing for two-wheel and three-wheel electric vehicles and motorcycles. It will continue to develop the rural low-speed transportation market and rely on its huge channel network and transaction data to enter new business areas.”
Private equity investors are exploring various ways of tapping into rural consumption in China. Most recently, Alibaba Group agreed to invest RMB4.5 billion in Huitongda Network, a PE-backed online retailer that works with abut 80,000 mom-and-pop stores in towns and villages. Technology-enabled supply chain services providers such as Songxiaocai and Dafengshou have also received funding.
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