Screenshot of WeLab logo from its website.
WeLab — an Internet finance startup operating in China and Hong Kong — recently secured US$160 million in its Series B fundraising round.
The round was led by Khazanah Nasional Berhad, with participation from ING Bank, and Chinese state-owned Guandong Technology Financial Group (GTFG).
The new funds will "continue to be invested in credit technology research and development," said Simon Loong, Founder and CEO of WeLab. "[By doing so, it will] enable the company to set the standard for mobile lending market and fulfill the young consumers' appetite for mobile banking."
Loong added that this round of fundraising is eight times bigger than its Series A round in January 2015. Back then, the startup raised US$20 million from a group of strategic and financial investors including CK Hutchinson's TOM Group and Sequoia Capital. The funds was used to launch new products in mainland China, and solidify the company's credit risk modeling capabilities with big data solution.
Commenting on the company's decision to invest in WeLab, Khazanah's Managing Director Tan Sri Azman Mokhtar said: "WeLab has an attractive business model in which the company cooperates with financial institutions to provide banking solutions on a purely online and mobile platform, while providing affordable credit to people who are unable to obtain financing through traditional channels."
With the aim of providing consumers with a cheaper and hassle-free way of borrowing money, WeLab operates two online lending platforms: Wolaidi in China and WeLand.hk in Hong Kong. Both platforms are powered by the company's proprietary risk management solution called WeDefend, which combines machine learning, big data technologies, and unstructured data to deliver a streamlined risk management and customer experience.
So far, WeLab has maintained a delinquency rate of around 1 percent based on loans that are 30 days past due, which is 0.21 percent below the rate of credit card bad debt at traditional banks as of June 2015, according to The People's Bank of China. In addition, the company has achieved zero fraud loss despite operating fully online.
It is thus not surprising that WeLab reported rapid growth in 2015 despite a backdrop of increasing economic uncertainty. The company reported loan disbursements increasing ten-fold, its customer base reaching 2.5 million individuals within 1.5 years, and the sourcing of RMB9 billion in loan applications.
To sustain this growth momentum, the company will be collaborating with Ule.com and the Postal Savings Bank of China on internet finance initiatives this year, said Loong.
Sign up for MIS Asia eNewsletters.