China cross-border fintech start-up secures $20m
Dowsure, a Shenzhen-based financial technology start-up that has developed credit-checking software that enables banks to lend to small-scale e-commerce vendors, has secured USD 20m in Series B funding.
The round was led by an undisclosed global strategic investor. Additional commitments came from China internet business incubator VenturesLab, Zhenshen-based supply chain finance provider Qianhaiyifang, and Plug & Play China. CDF-Capital and Plug & Play provided a CNY 10m (USD 1.6m) Series A in 2018.
Founded in 2016, Dowsure initially provided insurance services for Chinese e-commerce companies selling into overseas markets. It then started working with banks on lower-cost lending products.
The company has developed an assessment model for marketplace store owners that connects with existing application programming interfaces (APIs) used to facilitate online transactions and includes account locking features. It has helped dozens of Chinese banks provide pure credit loans based on store data and with no collateral.
Within eight months of launching the service, Dowsure's technology had played a role in more than CNY 35bn in gross merchandise value (GMV) generated by Chinese sellers through Amazon. While it is also popular among sellers using eBay, Shopee, Lazada, and Shopify, Amazon is Dowsure's main platform.
More than half of the 6m sellers on Amazon Marketplace are from China. Many are only able to borrow from banks at very high interest rates, given they are small, lack fixed collateral, and tend to have limited financial track records.
Dowsure claims its assessment model and algorithm can be implemented in other digital assets that generate online cash flow. The company is already working with software marketplaces and app stores on product prototypes.
"The market Dowsure is targeting has huge potential and sizing, we recognise Dowsure's approach to solve the underbanked issued in the cross-border e-commerce industry as the best practice in this market, and this model was also approved by multiple top banks in mainland China and HK," said Mark Mai, founder of VenturesLab.
Other investment activity in this area includes a USD 138m Series D for XTransfer, a cross-border payment services provider. It helps Chinese small- and medium-sized enterprises (SMEs) set up offshore accounts and remit and receive money in major export destinations.
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