Hong Kong's WeLab secures $156m Series C

The company said an unspecified number of new investors participated in the Series C as well as five existing investors, among them Alibaba Group’s Hong Kong Entrepreneurs Fund and the international arm of China Construction Bank. Previous backers include Khazanah Nasional, TOM Group, Ule Holdings – an e-commerce platform owned by TOM and China Post – Sequoia Capital China, ING, the International Finance Corporation, and Iconiq Capital.

Founded in 2013, WeLab initially focused on peer-to-peer (P2P) lending services through WeLend in Hong Kong and Wolaidai in mainland China. In 2017, the two platforms provided consumer loans amounting to HK$1.1 billion ($147 million) and RMB8.1 billion ($1.2 billion), respectively. While WeLend operated under a direct lending model, Wolaidai connected borrowers and lenders.

Its services are underpinned by artificial intelligence-enabled technology that analyzes unstructured mobile big data within seconds and makes recommendations on lending decisions. From the outset, WeLab aspired to become a software provider to the financial services industry and the company does help traditional institutions offer fintech services.

At the same time, the company has expanded in terms of geography and competency, and now operates six brands in three markets. It was among the first recipients of a virtual bank license in Hong Kong and plans to launch WeLab Bank next year; it has received financial guarantee and financial leasing licenses in mainland China; and it was issued a fintech license in Indonesia.

In Hong Kong, WeLend claims a market share of 13.2% and saw net profit growth of 155% in the 2019 financial year, according to a statement. In mainland China, WeLab Digital – formerly Wolaidai – has 41 million registered users and loan applications increased 412% year-on-year in 2019. The company also operates the Taoxinji and Tianmian Lab brands in the mainland, which focus on leasing services for consumer electronics and B2B enterprise solutions, respectively.

WeLab entered Indonesia in 2018 through a joint venture with local conglomerate Astra International. The Manucash brand has acquired 600,000 registered users. It is only one of 13 licensed fintech operators in the country.

The company has not disclosed any financial information. Its IPO prospectus last year indicated that revenue reached $155 million in 2017, up from $30 million the previous year, while the net loss shrank from $5.7 million to $3.7 million. The objectives for the new funding round are not dissimilar from those outlined in the prospectus: broadening the platform in terms of consumer lending and enterprise services, upgrading technology, and expanding the geographical footprint.

"With technological advancement, fintech has gradually been integrated into our daily lives over the last decade, transforming the traditional world of banking as we know it. 2020 marks the inflection point where the calls for supervision and governance are necessary, starting with regulated digital banks," said Simon Loong, founder and group CEO of WeLab.

The company’s previous funding round – an extended Series B round – came in late 2017 and comprised $220 million in equity and debt. It was led by Alibaba and IFC. The first tranche of the Series B, worth $160 million, closed the previous year and was led by Khazanah.

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• Topics
• Greater China
• Financials
• Expansion
• Technology
• Hong Kong (China)
• Fintech
• Growth capital
• Alibaba Group