Affirma leads pre-IPO round for China's Dianrong

The investment constitutes a re-up for Standard Chartered Private Equity, while also including new capital raised by Affirma upon its establishment earlier this year. Additional participants include existing shareholder Dalian Financial Industry Investment Group, a Chinese investment platform controlled by Japan's Orix Group. 

Dianrong said in April that it expected to raise $100 million, according to The Financial Times. The company said in a release confirming the latest investment that it had "sights now set firmly on filing [an IPO]."

It follows a $70 million round last year led by Orix Asia Capital with participation from CLSA Capital Partners, as well as a separate $40 million commitment a few months later from Dalian. Other previous investors include GIC Private, Northern Light Venture Capital, Tiger Global Management, and China Fintech Fund. The company had raised around $550 million in total as of mid-2018. 

The investment coincides with a string of defaults in China's P2P lending industry due to government efforts to crack down on fraud and broader restrictions on the flow of liquidity to the country's informal banking market. Earlier this year, Dianrong reportedly responded to the regulatory pressure with plans to shutter 60 of its 90 brick-and-mortar outlets and lay off up to 2,000 employees.

"In the face of constant market and regulatory changes, our directors are constantly adapting to the new regulations and tweaking the company's development strategy," said Kevin Guo, co-founder of Dianrong. "Over the next three years, we will harness our technological strength, in partnership with traditional financial institutions, to provide more high-quality, high-performing services to our customers."

Founded in 2012, Dianrong operates a comprehensive, one-stop financial platform aimed at providing customized lending and borrowing products and services to small businesses. "China's bank-driven financing model has traditionally centered around large organizations and SOEs [state-owned enterprises], and most small businesses and retail customers have been unserved," Dianrong co-founder Soul Htite told AVCJ last year.

Recent IPOs by Chinese P2P lending companies include a US filing by Pintec Technology, a diversified financial technology-as-a-service provider backed by a number of domestic VCs, and a $HK1 billion ($128 million) Hong Kong debut for 51 Credit Card, which counts GGV Capital and Shunwei Capital as investors. Meanwhile, Alibaba Group-backed WeLab, which operates as WeLend in mainland China, is said to be seeking $500 million in a delayed Hong Kong IPO. 

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• Topics
• Greater China
• Financials
• Technology
• Expansion
• China
• Standard Chartered Private Equity
• Affirma Capital
• ORIX Capital
• Financial Services
• SME