Legend Capital, SIG lead Series C for China’s PPDai
Legend Capital and SIG Asia Investment have led a Series C round of funding for PPDai, which claims to be the first and largest peer-to-peer (P2P) lending platform in China.
Other investors include VMS Investment Fund, Sequoia Capital and Lightspeed China Partners. Financial terms were not disclosed but the company said in an announcement that the funding size is close to $100 million.
Founded in 2007, PPDai serves as a bridge between individual lenders and small-scale borrowers, helping to meet the credit needs of enterprises that rarely receive support from commercial banks. Its service is free for lenders, while borrowers pay a commission.
The firm claims to differ from many practitioners by virtue of its strong risk controls. Last month, it launched a big data-empowered in-house risk control system called Magic Mirror. With more than six million users on its platform, Magic Mirror provides ratings for each loan in order to management default risks.
The capital injection will be used to develop new products, expand distribution channels, hire more staff and enhance the platform's online risk control system.
The Shanghai-based start-up previously received about $25 million in Series A financing from Sequoia in November 2012. Lightspeed led a Series B round - reportedly worth $50 million - in April 2014, joined by Sequoia and US-listed wealth management firm Noah Holdings.
Legend Capital is an active investor in Chinese internet finance. Its portfolio includes personal finance app Tongbanjie, online P2P lending review site P2Peye and online finance technology service provider CreditCloud.
P2P lending sites have proliferated in China. There were 1,263 sites as of June 2014, up from 600 at the end of 2013, 240 in 2012 and 20 in 2011. Most of the top 20 independent P2P lending sites have received VC funding, including Yooli.com, Jimubox and Renrendai.
CDH Investments recently participated in a RMB3 billion ($483 million) round of funding for Shanghai Lujiazui International Financial Asset Exchange (Lufax), a P2P platform controlled by Ping An Insurance Group. The round was led by Hong Kong-based investment firm BlackPine, with participation from the private equity division of China International Capital Corporation (CICC).
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