Kazanah leads $160m round for Hong Kong's WeLab

With ING and state-owned Guangdong Technology Financial Group also participating in the round, the company claims to be the first Chinese financial technology player to receive commitments from both an international bank and government investors. A significant portion of the new capital has been earmarked for developing WeLab's credit technology.

The company closed its Series A round in early 2015 with a $6 million commitment from DST Global's Yuri Milner, Iconiq Capital and Ule, an e-commerce platform owned by Hong Kong's TOM Group and China Post. This took the total raised to $20 million, following earlier investments from Sequoia Capital and TOM Group.

WeLab launched Hong Kong online lending platform WeLend in 2013, making initial loans off its balance sheet and through high net worth backers. By the time of the Series A, it had 14,000 members and processed over HK$1 billion ($129 million) in loan applications, of which 20-30% get approved. WeLend claims to provide financing cheaper and quicker than any other channel in Hong Kong.

Wolaidai, a mass-market peer-to-peer (P2P) lending platform that provides small loans for college students in mainland China, came online in late 2014. WeLab also entered sales finance, forming a partnership with Hutchison Telecom in Hong Kong through which customers can secure a loan to purchase a phone while standing in the store.

During 2015, WeLab's overall customer base expanded to 2.5 million individuals and RMB9 billion ($1.36 billion) in loan applications. Its delinquency rate is around 1% for loans that are 30 days past due, lower than for credit card debt at traditional banks.

The Series A went towards developing the company's capabilities in the design of internet finance products and big data and risk management products. This was in line with WeLab's goal to become a software and service provider that helps others get into internet finance, rather than function solely as a platform operator. This year it will start working on initiatives with Ule and Postal Savings Bank of China.

"WeLab's business model is attractive because the company cooperates with financial institutions to provide banking solutions on a purely online and mobile platform, while providing affordable credit to people who are unable to obtain financing through traditional channels," Azman Mokhtar, managing director at Khazanah, said in a statement.

ING added that it sees WeLab and other financial technology investments as ways of participating in new innovations in banking with a view to improving customer experience. It will look into the possibility of partnering WeLab in certain markets.

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• Topics
• Financials
• Expansion
• Greater China
• Technology
• Financial Services
• Technology
• Hong Kong (China)
• China
• Khazanah Nasional
• Growth capital