Qudian, a China-based online consumer lending service backed by financial services provider Ant Financial and game producer Kunlun Tech, will raise $900m from its US flotation, Reuters reported today.
The company has priced 37.5 million American depositary shares (ADSs) at $24.00 each on the New York Stock Exchange, above the $19 to $22 range it had set, according to sources close to the matter, giving it a market value of about $7.9bn.
Founded in 2014 and formerly known as Qufenqi, Qudian runs an online platform that provides credit to mostly youthful customers who are underserved by traditional banks due to their lack of credit data.
The company utilises big data and artificial intelligence technology to assess the creditworthiness of potential borrowers, and facilitated $5.6bn of loans in the first six months of 2017. It made $144m in net profit from $270m in revenue over the same period.
Ant Financial, an affiliate of e-commerce firm Alibaba, led Qudian’s $200m series E round in August 2015, investing alongside venture capital firms BlueRun Ventures and Source Code Capital, the latter of which had led a $100m round for the company in late 2014.
Kunlun participated in a $100m round in April 2015 together with Source Code and Bluerun, before investing $27m in January 2016.
Investment firm Phoenix Fortune and smart device developer Hangzhou Liaison Interactive Information Technology co-led a $449m round for the company in July 2016.
Kunlun will sell almost 590,000 ADSs in the offering, generating a $14.1m return, and its stake was diluted from 19.7% to 17.4%. Ant Financial is not selling shares, and its stake will be cut from 12.8% to 11.4%.
Phoenix is selling $11.4m of shares in the IPO, and its stake will go down from 19.7% to 17.5%, while Source Code is divesting approximately $14.6m of shares and will retain an 11.4% stake.
Bluerun, which holds shares through an affiliate called Zhu Entities, will sell almost $5.2m of shares and come out with a 6.4% stake.
Citigroup, China International Capital Corp, Credit Suisse, Morgan Stanley, UBS Securities, Stifel, Nicolaus and Company, and Needham & Company are the underwriters for the IPO.
The underwriters have the 30-day option to buy just over 5.6 million additional ADSs, equating to $135m, which would increase the size of the offering to almost $1.04m.