Chinese online lender Dianrong.com is raising $150 million from investors, including Standard Chartered Plc, in a round that values the startup at about $1 billion, according to people familiar with the matter.
The fundraising will close in a few weeks, and strong interest from potential investors boosted the startup’s valuation from an earlier estimate of $800 million, the people said, asking not to be identified because the process hasn’t been completed, Bloomberg reported.
The new investments come as China’s online lending market explodes, challenging both traditional state-owned banks and the multitrillion-dollar shadow banking sector. Peer-to-peer lenders in China gave out at least $32.5 billion in loans last year, almost quadruple the rest of the world combined, according to UK investment bank Liberum Capital Ltd.
Dianrong declined to comment in an e-mail. Spokesmen for Standard Chartered didn’t respond to e-mails or phone calls seeking comment.
In peer-to-peer lending, companies use the Internet to match borrowers and lenders at better rates than banks. Lending in China will almost double this year to $60 billion, compared with $11.7 billion in the U.S., according to Liberum Capital.
China’s biggest such lender, Lufax, completed a round of funding in April that valued the company at $10 billion, the Wall Street Journal said. The company, formally known as Shanghai Lujiazui International Financial Asset Exchange Co., is 49% owned by Ping An Insurance (Group) Co.
Dianrong has facilitated about 1 billion yuan ($161 million) loans, mostly to businesses. It raised $12 million during three funding rounds, with investors including Hong Kong developer Sun Hung Kai Properties Ltd., according to Crunchbase.
In total, 24 peer-to-peer firms have received 3 billion yuan of financing from companies, including SoftBank Corp., Sequoia Capital and Xiaomi Corp., as of September, according to Zero2IPO Group, an industry tracker.
