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Exits, Venture Capital

China’s LexinFintech Completes $108M Listing As Sixth Chinese Fintech IPO In US

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LexinFintech Holdings Ltd. (NASDAQ:LX), a Chinese online lender previously known as Fenqile backed by investors including Matrix Partners and JD.com Inc., has completed a listing on the NASDAQ to raise US$108 million.

The IPO is the sixth Chinese fintech companies that have completed IPOs in the U.S. this year, as Chinese venture capital firms experienced a year of record IPO exits in 2017. China Rapid Finance, Qudian, Hexindai and PPdai and Jianpu Technology completed IPOs previously.

Shares of LexinFintech surged about 19% on its first trading day. But U.S.-listed Chinese fintech firms have seen their stock prices dropping significantly last month, as the Chinese government issued tighter rules to rein online micro lending.

Shenzhen-based LexinFintech offered 12 million American depositary shares (“ADSs”) at a price of US$9.00 per ADS, at the lower end of its indicative range of US$9 to US$11 apiece.

The IPO paves the way for LexinFintech’s backers to exit. Matrix Partners owns 12% of the company’s shares. Other shareholders include K2 Partners, JD.COM Asia Pacific Investment Ltd., Magic Peak Investments Ltd., a subsidiary of Taikang Insurance Group Inc., as well as Apoletto Asia Ltd., a fund backed by Russian billionaire Yuri Milner.

LexinFintech offers personal installment loans, installment purchase loans and other loan products to Chinese consumers. It matches customer loans with funding sources including individual investors on Juzi Licai online investment platform, institutional funding partners in direct lending programs and asset-backed securities.

It targets educated young adults aged between 18 and 36 in China. As of September 30, 2017, the company had over 6.5 million customers with an approved credit line and over 20 million registered users.

The company booked a revenue of RMB3,988 million (US$599 million) in the nine months ended September 30, 2017, a 35% growth compared to the same period last year. It had a net income of RMB140 million (US$21 million), compared to a net loss of RMB105 million (US$16 million) last year.

“Consumer finance has great potential in China. As a technology-driven company, LexinFintech has a good business sense and strong execution,” said Xiao Min, a partner at Matrix Partners.

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