Chinese P2P lending company Dianrong, which offers lending solutions and investment products, has completed its latest funding round, according to reports.
Standard Chartered Private Equity was the main investor, and Affirma Capital also participated in the round. The amount of the raise wasn’t disclosed, but Dianrong was reportedly trying to raise $100 million so that it had enough to satisfy China’s capital requirement — $74.5 million.
Dianrong said Dalian Finance Industry Investment Group also invested in the funding round, and that the capital will help keep the business running while it waits for accreditation from Chinese regulators. Existing investors in the company include CMIG Leasing, China Minsheng Investment Group, Tiger Global Management and CLSA.
Dianrong is headquartered in Shanghai and it’s a privately held company. The company is known as the “lending club of China.” The company started by specializing in small consumer and business loans.
It was founded in 2012 and said that it handles $500 million in loans every month for 4 million borrowers in retail. The company has raised $549 million over seven funding rounds since the end of 2013. The most it raised in one round was $290 milion.
The company’s founder, Kevin Guo, said the online finance industry in China “is undergoing a reshuffle.”
“Over the next three years, we will harness our technological strength to provide more high-quality, high-performing services,” Guo said.
There has been a lot regulatory enforcement on counterfeit P2P platforms in the country, which has led to investors panicking and pulling out money, which harms the smaller platforms as well. The increased oversight will likely cause the industry to continue to shrink and merge.
In May 2018, there were about 1,872 P2P platforms in the country. That number fell to 1,009 in January and could drop to as little as 300 this year. Dianrong, for example, shut down 60 of 90 offline stores and laid off around 2,000 workers.