Chinese officials may have given the stamp of approval for the alternative lending market last week, but it’s foreign alt-financers that seem to be catching the most attention from Chinese companies.
In reports published by the Financial Times Monday (June 15), Chinese technology conglomerate Beijing Kunlun was said to have invested $34.3 million in U.K. P2P lender LendInvest, making the first foreign investment of the firm. After recording a $4.8 million profit last year, reports said chief executive Christian Faes was meticulous about choosing the right partner for LendInvest. According to Faes, a tie-up with Beijing Kunlun will provide the financial growth necessary for the company as it prepares for an IPO next year.
The backing signals the Chinese market’s embrace of alternative lending, which recently nabbed an endorsement by the State Council. According to Morgan Stanley analysts, China has a growing P2P lending market, with more than 1,500 platforms at the end of last year. A few hundred of them, however, have failed.
“We expect the P2P market growth to remain robust in 2015 but still expect a large number of platforms will probably fail,” the analysts predicted, according to FT.
Regardless, China is strengthening its position in the world of P2P lending in other ways. In addition to Beijing Kunlun’s support for LendInvest, other major Chinese conglomerates have also lent a hand to foreign alternative lenders, especially in the U.K.
Local social networking firm Renren pumped $70 million into U.S.-based LendingHome only months ago, while eCommerce giant Alibaba made a high-profile deal with two UK lenders, iwoca and ezbob, to encourage funding to the businesses in the U.K. that want to procure goods and services through the Alibaba B2B eCommerce platform.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More