Sina invests $30m in Chinese fintech player Shuhe
Shuhe Technology, a Chinese consumer financial services start-up that provides installment repayment plans for credit card holders, has raised $30 million in Series B funding from Sina, a local internet company that operates microblogging site Weibo.
“This new round of funding will help us expand our coverage of credit card holders in China and also enhance our risk control and technological capabilities,” said Zhigang Xu, CEO of Shuhe. The company will launch several initiatives with Sina, covering areas such as data-sharing, technology, and product development.
Founded in 2015, Shuhe is a wholly owned subsidiary of outdoor advertising business Focus Media. Operating through an app called Huanbei, the company serves customers with outstanding bank debts, typically linked to credit cards. It pays off a customer's debt - of up to RMB50,000 ($7,460) - immediately and signs them up to an installment plan of 3-12 months. Shuhe claims to have 25 million registered users and have completed over 6.6 million transactions since inception.
The business model is different from those pursued by some of China’s biggest online micro-loan providers. Alibaba's virtual credit card product Huabei, for example, extends loans to young consumers who don't have credit cards so they can make small lifestyle-related purchases. Shuhe mainly targets white-collar workers who usually qualify to receive credit cards.
In 2017, China had nearly 6.7 billion credit and debit cards in circulation, according to the payments team at GlobalData, a research company. The firm predicts that China will overtake the US as the largest bank card market in the world in 2019.
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