China’s Lufax raises $1.2b round

The round included $924 million raised from new investors plus an additional $292 million from existing backers who exercised an option to participate, a statement said. Bank of China Group Investment, Guotai Junan Securities, and an offshore unit of China Minsheng Bank were among the new investors. The round values the company at approximately $18.5 billion.

Lufax was set up in September 2011 with RMB837 million in capital and the support of the Shanghai government and Ping An. The management team is headed by Gregory Gibb, who was previously a senior partner with McKinsey & Company responsible for Greater China financial services coverage.

The company operates two platforms. Lufax.com is a standard P2P business, providing financing solutions to small and medium-sized enterprises (SMEs) and individuals. It matches borrowers and lenders, a Ping An subsidiary reviews risk and provides guarantees, and then funds are transferred via third-party payment.

The second platform, Lfex.com, is a financial assets trading platform that focuses on corporate investors and financial institutions. It is positioned as an "exchange of exchanges" that interacts with banks, insurance companies, securities firms, trust companies, asset managers, leasing and finance providers, and corporates.

In March, the company raised a RMB3 billion ($483 million) round of funding led by BlackPine, a Hong Kong-based investment firm, and the PE division of China International Capital Corporation (CICC). CDH Investments committed $60 million in the round, which valued Lufax at approximately RMB60 billion.

The new capital will be used to support Lufax's existing P2P online lending business, as well as to diversity into new areas such as wealth management. The company will focus on building a more comprehensive platform from online to offline, and plans to offer cross-border investments for Chinese clients.

Gibb said in a press conference in Shanghai that the company is considering an IPO as early as this year, local media reported.

At the end of 2015, Lufax had more than 360 million active users and handled over RMB1.6 trillion worth of transaction on its platforms. Ping An Group now owns about 43% of Lufax following the second fundraising round, down from 47.49%.

Lufax's funding round came after JD Finance, the financial subsidiary of online retailer JD.com, completed a RMB6.65 billion funding round led by Sequoia China and China Taiping Insurance.

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• Topics
• Greater China
• Technology
• Financials
• Venture
• China
• Financial Services
• CDH Investments Management
• Growth capital
• Venture
• Ping An
• Technology