Hong Kong Fintech Startup WeLab Nabs $160 Million

crop2 WeLab

Simon Loong’s winning ways at WeLab

Hong Kong-based fintech startup WeLab has nabbed a large $160 million Series B financing at a valuation estimated at nearly $1 billion. It’s not only a new milestone for Hong Kong startups but also a sign of how new models for online and mobile lending in the region are taking off.

The round, led by Malaysia’s Khazanah Nasional Berhad with participation from the Netherlands’ ING Bank and China’s Guangdong Technology Financial Group, also stands out for involving both Chinese investors and an international bank.

WeLab, founded in 2013, previously raised an initial $20 million in January 2015 from a group of investors including Sequoia Capital and Hong Kong tycoon Li Ka-shing’s TOM Group. The startup boasts a ten-fold increase in sales volumes between rounds, and plans to use its new funds to launch products in Mainland China, expand into rural China, enhance operations, improve on its credit risk modeling technology, and begin working with e-commerce platform Ule.com and the Postal Savings Bank of China on new initiatives.

WeLab operates both Wolaidai, a Chinese mobile lending platform, and WeLend.hk, a Hong Kong online lender that was the island’s first P2P lending platform. The startup offers loans through a fully automated process that takes minutes and can be completed on mobile. It relies on 800 data points related to potential borrowers to make decisions on approvals, and obtains funds from banks and other financial institutions to make below-market-rate loans, with a typical loan carrying an interest rate of about 10% to 20%.

WeLab makes money on the difference between the lending rate and the cost of its funds. The platform reports a delinquency rate of 1% on loans that are 30 days past due, which it asserts is lower than most credit cards issued to new users.

WeLab has loaned a total of $1.37 billion to 2.5 million customers. The majority of these users are in mainland China, a market in which only one-quarter of consumers hold a credit card. In comparison, 36 percent have borrowed money from P2P lending groups.

Globally, $10.5 billion in venture money has poured into fintech startups in the first three quarters of 2015, about 66% more than the $6.05 billion for all of 2014, according to research firm CB Insights. WeLab is ING’s third fintech investment in five months, after Belgian digital loyalty site Qustomer and U.S. lending platform Kabbage.

WeLab’s CEO, Simon Loong, was the recipient of Silicon Dragon’s Entrepreneur of the Year award in 2014.

 

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