PE-backed VCredit raises $152m in HK IPO

The company sold 78.7 million shares at HK$20 each, according to a filing, the bottom of the pricing range indicated in the prospectus. VCredit increased the offering size from the original 68.6 million shares based on investor demand.

VCredit has designated about 70% of the net proceeds from the offering to be used for strengthening the capital base of its subsidiaries. Another 20% will be invested in improving the company’s research and technology capabilities.

Founded in 2006, VCredit aims to provide underserved borrowers in China with accessible, tailored and fairly priced finance products. It primarily operates by originating transactions between borrowers and traditional financial institutions, and also lends directly to borrowers. VCredit originated RMB24.5 billion ($3.8 billion) worth of loans in 2017, up from RMB7.9 billion the year before.

Risk management is a key focus of VCredit’s business, and the company claims its technology platforms can establish creditworthiness with a high degree of reliability. Customers’ credit ratings are primarily based on analysis of consumer credit data from China’s national consumer and credit reporting system, supplemented with customer data aggregated from a range of sources.

VCredit’s revenue for the year ended December 2017 came to RMB2.7 billion, up from RMB1.4 billion the year before. Over the same period the company’s net loss grew from RMB565 million to RMB1 billion.

TPG currently holds 31 million shares in VCredit, representing a 6.2% stake before the offering. The firm invested $50 million in the company’s Series C round last year.

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• Topics
• Greater China
• IPO
• Financials
• Consumer
• China
• Hong Kong (China)
• Exit
• TPG Capital
• Financial Services