Tencent-Backed WeBank Nears $5.5B Valuation

In an example of one of the latest firms to reach unicorn status, the Chinese Internet player Tencent Holdings Ltd.'s online banking operation, known as WeBank, is in line to raise enough funds to value the unit at $5 billion or more.

The Wall Street Journal reported Wednesday (Jan. 27) that WeBank, which has Tencent as a 30 percent stakeholder, will grab as much as $450 million in this new round, with a leadership role in the financing being assumed by Warburg Pincus. Other investors include Temasek Holdings, which is the state-owned investment firm in Singapore. The deal is likely to be finalized as soon as this week, said WSJ.

The capital raise is in full force as WeBank is seeking to garner its spot in online finance in China. The competitive landscape has been shaping up such that larger financial players are looking to link with service providers in an effort to stave off competition from the likes of Alibaba Group Holding.

A nod to the race for money comes as Alibaba's Ant Financial has been in talks for its second round of financing.

As has been widely reported, the growth of the intersection between technology and finance has led to increased government scrutiny within China based on competition and data concerns. The online banks, such as WeBank, have not been able to expand as much as they would like due to rules that state bank accounts cannot be opened remotely, no matter the advanced security that is being deployed to help speed the process. And the online banks that have Tencent and Alibaba among their backers have advantages that might not be enjoyed by others in the financial technology space, such as access to data that is logged in real time across the two parent companies.

[bctt tweet="The growth of the intersection between technology and finance has led to increased government scrutiny."]



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.