WeLab, an online lending platform based in Beijing and Hong Kong, will launch more financial products in China after landing an impressive $160 million Series B. The round was led by Khazanah Nasional Berhad, Malaysia’s strategic investment fund, with participation from ING Bank and Guangdong Technology Financial Group, which is run by the Chinese government.
The company operates two online lending platforms—Wolaidai, a lending platform for China, and WeLend.hk, its counterpart for customers in Hong Kong—and has now raised a total of $182 million in venture funding.
Founder and chief executive officer Simon Loong tells TechCrunch that WeLab’s Series B will be used to improve its technology, which uses non-traditional sources of data to assess a lender’s risk profile, and strike partnerships with companies and banks. This year, WeLab will begin working with e-commerce platform Ule.com and the Postal Savings Bank of China to launch online financial products.
Since its launch in 2013, WeLab has loaned money to 2.5 million customers, the majority in mainland China. Only about a quarter of Chinese consumers hold a credit card, but Loong says that 36 percent of them have borrowed money from peer-to-peer lending groups, microloan programs, or friends and family. WeLab wants to give people who need small business or personal loans a more efficient alternative. Many don’t have an established credit or lending record, however, and have a hard time securing capital from financial institutions at a reasonable interest rate.
While the company doesn’t disclose exactly how it builds risk assessment profiles, Loong says it uses online sources, including bill payment records and social media profiles, to verify the identity of borrowers and figure out how likely they are to pay back their loans on time. WeLab claims it has maintained a delinquency rate of one percent on loans that are 30 days past due (the average credit card delinquency rate was 1.21 percent as of June 2015, according to the Bank of China). Most of its loans carry an interest rate of about 10 percent to 20 percent, which Loong says is lower than most credit cards issued to new users.
Wolaidai and WeLand.hk both compete with traditional lenders, but sets itself apart by letting consumers complete the entire loan application process on their smartphones. Loong says most banks require at least one in-person meeting, and moving the entire lending process online give WeLab an edge as expands into smaller cities.