Deal focus: Black Fish emphasizes focus on fintech

Alex Yan and Conor Yang took Chinese online package tour provider Tuniu all the way to a US public listing in 2014. Last September, the company generated its first quarterly profit and Yan and Yang deemed their work done. They resigned their positions and started a new venture – consumer finance platform Black Fish – alongside another Tuniu alumnus and a banking professional. 

Financial technology is a hot topic in China, with several VC-backed companies such as Qudian, PPDai and Rong360 completing IPOs in the US. China’s central bank, meanwhile, issued a set of stringent restrictions to regulate the online micro-lending businesses that target at young borrowers. Shares of Qudian and PPDai duly fell below their offering prices. 

This had little impact on Black Fish’s first institutional round of fundraising, though. In the space of three weeks, the company received RMB950 million ($146 million) from Lightspeed China Partners, Morningside Venture Capital, Jafco Asia, and Gobi Partners. Domestic conglomerate Nanjing Fullshare Industrial Holdings also participated, in conjunction with Tao Zhang, Meituan-Dianping’s chairman and CEO, and Black Fish’s management team.

“Like us, investors are very positive on China’s online finance industry, given many traditional industries are being impacted by the broader consumer upgrade trend,” says Yang. “Our four founders are serial entrepreneurs – each of us has built or operated a number of successful tech companies before in areas such as consumer and financial services. VC investors trust our execution capability to make the new company successful.” 

Black Fish has just launched its mobile app. Unlike Alibaba Group’s Alipay and WeChat’s WePay, which require users to link their mobile wallets with debit or credit cards issued by banks, the Black Fish product directly provides credits and installment payments for individuals to purchase items online, with more than 40,000 stock keeping units. The company works with thousands of small sized Chinese banks to provide loans. 

“Smaller banks have lending capital but they don’t necessarily have online operations. We help them acquire online customers and manage credit risks,” explains Yang. 

Consumer loans extended by online platforms in China reached RMB327 billion in 2016 and they are projected to hit RMB2.3 trillion by 2020, according to iResearch Consulting. Black Fish plans to add more online retail categories and expand offline.  

“We expect more competitors in this space, but we are very much focused on what we’re doing and we will continuously improve our platform based on feedback from users,” says Yang. “When Tuniu started, Ctrip was already very big. However, Tuniu focused on packaged tours and overtook Ctrip in this segment. Being focused is very important.”   

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• Topics
• Greater China
• Financials
• Technology
• Early-stage
• China
• Lightspeed Venture Partners
• Morningside Technologies
• JAFCO
• Gobi Partners