Hong Kong's PE-backed WeLab files for IPO

WeLab’s prospectus does not indicate the size or pricing of the offering, but the company was previously reported to be seeking up to $500 million. Proceeds from the offer will be used to strengthen the business by expanding its capital base, obtaining licenses and permits, and developing new products and services. The company will also invest in its research and technology capabilities.

Founded in 2013 by a team of finance and technology professionals, WeLab claims to be the only online consumer credit platform with a significant presence in both Hong Kong, where it lends directly through WeLend, and mainland China, where it connects borrowers and lenders through WoLaiDai. It primarily targets borrowers aged 20-35 who are tech-savvy and educated with above-average creditworthiness.

The company believes these borrowers are underserved by traditional financial institutions because of their smaller loan size requirements and perceived higher risk profiles. By establishing a relationship early, WeLab hopes to secure long-term access to these consumers and become their lender of choice.

In 2017 WeLab provided HK$1.1 billion ($147 million) in loans through WeLend, up from HK$578 million the year before. WoLaiDai facilitated RMB8.1 billion ($1.2 billion) in loans in 2017, up from RMB2.6 billion in 2016. It also facilitated RMB100 million and RMB2.1 billion in loans to enterprise customers in 2016 and 2017, respectively.

The company’s total revenue came to $155 million for the year ended December 2017, up from $30 million the previous year. Over the same period, its net loss shrank from $5.7 million to $3.7 million.

WeLab’s $20 million Series A round in 2015 was led by Sequoia Capital and Li Ka-Shing's TOM Group, with participation by DST Global founder Yuri Milner, Iconiq Capital and Ule Holdings, an e-commerce platform owned by TOM and China Post.

Khazanah led the company’s $160 million Series B round in 2016, which also featured ING and Guangdong Technology Financial Group. This was extended by Alibaba and IFC last year in a Series B-plus round that totaled $220 million including equity and debt financing.

With a 12.4% holding, Khazanah is currently the second-largest shareholder in WeLab, after founder Simon Loong. TOM holds a 6.8% stake in the company, while Ule controls 5.9%, and Sequoia, ING, and IFC have 2.9%, 1.8% and 1.4%, respectively. Alibaba holds a 0.4% stake through its Hong Kong Entrepreneurs Fund.

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• Topics
• Greater China
• Financials
• Technology
• IPO
• Hong Kong (China)
• China
• Financial Services
• TMT
• Exit
• Alibaba Group
• IFC
• Khazanah Nasional
• Sequoia Capital