TechCrunch: China Rapid Finance, which claims to be the country’s largest online consumer lending marketplace, has closed a $35 million Series C round led by Broadline Capital. The round pegs the company’s pre-money valuation of $1 billion. China Rapid Finance is reportedly gearing up for an initial public offering in the U.S.
Founded in 2001, the company has already facilitated 2.5 million loans on its platform, which connects borrowers and lenders. Part of its plans for its latest funding round is marketing to the 50 million consumers it has already pre-screened.
After years of tight control by the government, China’s consumer loan and credit card market is opening up. Many Chinese consumers, however, don’t have credit scores because there isn’t a ubiquitous system like FICO in the U.S.
The People’s Bank of China and State Information Center of China offer credit ratings, but many people don’t have the lending histories necessary to build scores in those systems. Several companies, however, are stepping up with alternative ways of assessing a potential borrower’s ability to pay back loans. Read the full article
Financial Review: China tightened control of online financing, saying it is looking to develop healthy industry growth amid criticism the platforms contributed to an equities plunge that wiped $3 trillion off the market. All client funds must be parked at established banks and Internet finance firms will need approval from financial as well as cyberspace regulators, the People’s Bank of China said in a statement on its website on Saturday. They must also provide sufficient disclosure and send risk reminders to clients. China’s online lenders helped fuel an equity roller-coaster that saw the benchmark index rallying more than 150% in the 12 months through June 12 before abruptly crashing. The sites offered 3.1B yuan ($499M) of new loans for stock investment in May, about six times that of January, according to the Yingcan Group, which tracks the nation’s more than 2,000 P2P finance platforms. Read the full article