WeLab Online Lending Platform Secures $160M To Expand

WeLab, a Hong Kong-based FinTech startup, has raised $160 million in its Series B round to further expand its roots in the Chinese market with the launch of new financial products.

The funding round was led by Malaysia’s state fund, Khazanah Nasional Berhad, and saw participation from Chinese government-run Guangdong Technology Financial Group and ING Bank, according to Reuters.

The startup now plans on collaborating with Ule.com, an eCommerce platform, and the Postal Savings Bank of China to launch new online financial products.

WeLab, which operates its business in Hong Kong through its online lending platform, WeLand.hk, has been moving fast to expand its Chinese unit, called Wolaidai, and has so far lent money to over 2.5 million customers.

Much of the Chinese loan market is dominated by peer-to-peer lending groups, microloan programs or borrowers taking personal loans from friends and family — accounting for 36 percent of the quarter of the Chinese population that has access to a credit card loan, said WeLab Founder and CEO Simon Loong in an interview with TechCrunch.

The company is aiming at providing loans to borrowers, who have needs for personal loans, or to small businesses that do not have a solid credit history, preventing them from acquiring loans from bigger financial institutions at reasonable rates, he added.

And to tap into that market, the company has built itself a model, which helps calculate risk assessment profiles of potential borrowers using alternate records, like utility bill payments and social media activity. The company currently offers loans at an interest rate between 10 percent and 20 percent, which Loong said falls below the market average.

For customers who fail to make payments on time, the company reportedly charges them at a 1 percent delinquency rate, which is lower by 0.21 percent than the average noted across China last year.

In order to expand its reach, the company has also refocused its efforts on building its mobile platform, which allows borrowers to apply for loans right from their cell phone. This, essentially, sets it apart from traditional FIs that still rely on a tedious application process, the company said.