China fintech specialist Pintec files for US listing

The company is a technology-as-a-service provider that enables its partners – businesses operating in areas such as online travel, e-commerce, telecom, software, internet search, and online classifieds – to deliver financial services that help drive sales of their core products. These services include point-of-sale financing, personal and business loans, wealth management, and insurance.

As of March 2018, Pintec had 179 business partners, 81 financial services partners, and 21 million registered users for point-of-sale financing and loans. Since it was founded in 2012, the company has facilitated RMB23.9 billion ($3.8 billion) in loans for 3.8 million borrowers and RMB3.7 billion in wealth management products for 168,000 investors.

The business is built on a “data lake,” a big data storage operation that accumulates credit bureau, transactional, behavioral, social and demographic information, and “data service bus,” an external data querying and computation system. These drive Pintec’s risk assessment and credit assessment engine, enabling the company to make instant credit and pricing decisions.

Personal installment loans make up the bulk of the company’s business, accounting for RMB3.53 billion of the RMB4.9 billion in loans facilitated during the three months ended June. These loans were RMB1,000-200,000 in size with terms of 1-36 months. Most were issued through Pintec’s own peer-to-peer (P2P) lending platform. This platform – Jimubox – was responsible for three-quarters of the company’s overall outstanding balance of RMB7.49 billion for the three-month period.

Jimubox used to be Pintec’s primary service offering but as the company began to diversify its business – offering loan solutions to business partners under the Dumiao brand and launching the Hongdian and Polaris wealth management platforms – the P2P platform was spun out into a separate entity in 2015. Pintec is trying to ease its reliance on Jimubox as a source of funding.

The company received $5 million in Series A funding in March 2014 and a Series B round of $37.2 million later the same year. The Series C, completed in March 2015, was worth $84 million. Ventech, Xiaomi Ventures, Shunwei Capital, and Matrix were among the investors.

In June, Pintec announced that it had raised $103 million in funding led by Sina Corporation and Mandra Capital, a Hong Kong-based venture capital firm. The prospectus indicates that the company received $64 million in new funding and converted previously issued convertible loans, with a principal amount of $39.5 million, into equity.

Mandra has a 7.9% stake in Pintec, while Sina owns 7.7%. Ventech, Xiaomi Ventures, and Matrix had 7.5%, 7.2%, and 5.1%, respectively.

Most of the company’s revenue derives from technical service fees for providing online credit assessment and post-lending management services. Revenue came to RMB568.7 million last year, up from RMB54.9 million in 2016. Over the same period, its net loss narrowed from RMB200.5 million to RMB84 million. Pintec turned profitable in the first quarter of 2018.

The size and pricing of the IPO have yet to be decided.

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• Topics
• Greater China
• IPO
• Financials
• Technology
• China
• Matrix Partners
• Xiaomi
• Shunwei Capital Partners