Japan’s Orix Leads $70M Round In Chinese P2P Lending Platform Dianrong

Japan’s financial services firm Orix Corp has led a US$70 million follow-on series D round funding in Chinese peer-to-peer lending platform Dianrong, and plans collaboration between the two companies.

Orix committed US$60 million via its wholly-owned investment vehicle Orix Asia Capital Ltd. CLSA, the overseas platform of China’s largest investment bank CITIC Securities, also participated in the round by committing the remaining US$10 million, according to a company announcement.

The investment follows a US$220 million series D round Dianrong raised five months ago, from GIC Private Ltd., Singapore’s sovereign wealth fund, CMIG Leasing Group, a leasing business unit under China Minsheng Investment Group Co., Ltd, and South Korea’s Simone Investment Managers.

"Dianrong is at the frontiers of fintech and we are delighted to be part of their journey," said Kiyoshi Fushitani, director and corporate executive vice president of Orix. "Beyond the investment, ORIX is looking forward to collaborating with Dianrong in China and emerging Asia."

Founded in 2012, Dianrong offers loan originations, investment products and marketplace lending solutions. The company claims that it originates US$500 million in loans each month for four million retail borrowers.

The company is reportedly planning an initial public offering on the Hong Kong Stock Exchange later this year, aiming to raise US$500 million.

A number of other Chinese fintech companies completed IPOs on the New York Stock Exchange in the second half of 2017. In November, Jianpu Technology Inc, formerly known as Rong360, completed a US$180 million listing. In the same month, PPdai Group completed a US$221 million IPO. One month prior, Qudian’s IPO on the New York Stock Exchange raised US$900 million.

Meanwhile, the Chinese government has taken measures to regulate online financial services like P2P lending in a move to contain financial risks associated with these platforms. In September, regulators were reportedly considering banning P2P platforms from offering online deposit-like investment products with flexible investment periods, or promising investors that they can withdraw their funds at anytime.

Dianrong previously raised a US$220 million of series D round funding in last August from GIC, CMIG Leasing and Simone. In 2015, it completed a series C round funding of US$207 million from Standard Chartered Private Equity and China Fintech Fund. Investors in earlier funding rounds included Tiger Global Management, AMTD, Northern Lights Venture Capital and Max Giant.