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Exits, Venture Capital

Chinese Online Lending Firm WeLab, Backed By Li Ka-Shing, Plans $500M IPO

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Hong Kong-based online mobile lending start-up WeLab, backed by investors including Credit Suisse Group AG, local tycoon Li Ka-Shing and Alibaba Hong Kong Entrepreneurs Fund, is planning an initial public offering on the Hong Kong Stock Exchange.

The firm aims to raise as much as US$500 million via the listing, according to media reports citing insiders. WeLab did not respond immediately to an inquiry from China Money Network to confirm the information.

Founded in 2013, WeLab operates across the Greater China region, with platform Wolaidai in mainland China and platform WeLend in Hong Kong. With proprietary risk management technology, the company claims it can analyze unstructured mobile big data within seconds to make credit decisions for individual borrowers. It also licenses its technology to banks and telecom companies.

Chinese government is tightening control on online micro-lending platforms. On Tuesday, China’s Internet Financial Risk Special Rectification Work Leadership Team Office, a regulatory body tasked by the central government to rein in risks in online financial sector, issued a notice requiring local government to stop issuing new licenses to micro lending firms.

The new regulation led to significant losses of market value for U.S.-listed Chinese fintech companies as their share prices plummeted. Jianpu Technology Inc., the operator of Rong360, closed at US$5.7 apiece yesterday, down 23% compared with US$7.4 per share opening price on Monday before the proposed regulation was announced. Another similar fintech company Qudian closed at US$16.2 yesterday, down 24% compared to Monday opening price of US$21.2.

So far, WeLab has raised a total of US$425 million in financing. Earlier this month, it raised a US$220 million series B+ round from Alibaba Hong Kong Entrepreneurs Fund, International Finance Corp, Credit Suisse and others.

The company also raised a US$160 million series B round in January last year led by Malaysia’s state fund Khazanah Nasional, with participation from ING Bank and Guangdong Financial Technology Group.

One year prior, the company completed a US$20 million series A round from DST Global’s founder Yuri Milner, U.S. investment advisor Iconiq Capital, TOM Group, a media conglomerate controlled by Li Ka-shing, and Sequoia Capital.

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