China-based peer-to-peer lending services provider Dianrong has closed a funding round of undisclosed size led by Standard Chartered Private Equity (SCPE), a subsidiary of financial services firm Standard Chartered.
Affirma Capital – a private equity offshoot of SCPE – participated in the round alongside Dalian Finance Industry Investment Group (DFIIG), an investment partnership co-founded by financial services firm Orix Group.
The size of the round was not disclosed but the Financial Times reported in April this year that Dianrong would seek $100m from a group of new and existing investors including Standard Chartered, Orix Group and Singaporean sovereign wealth fund GIC.
Dianrong offers peer-to-peer lending services that allow customers to directly lend to each other, though the toughening up of China’s peer-to-peer lending regulations has forced it to make redundancies and close some of its retail outlets.
Company founder Guo Yuhang injected $10m of his own funds into Dianrong in December 2018 in an attempt to stave off the pressure, and the latest cash will help bring Dianrong’s registered capital to the RMB500m ($73m) regulatory threshold, up from $43.8m at present.
The proceeds will also support Dianrong’s search for new business models and the strengthening of its underlying technology. A new licensing regime is expected to be introduced for select Chinese peer-to-peer lenders by the end of 2019.
Dianrong had assembled almost $540m in funding prior to the latest round, including $40m supplied by DFIIG in August 2018.
The company completed a $290m series C round in January 2018 having added $70m from Orix subsidiary Orix Asia Capital and CLSA, part of investment bank Citic Securities, to a $220m first tranche led by GIC and backed by CMIG Leasing and Simone Investment Managers.
Standard Chartered had previously co-led the company’s $207m series C round in 2015, participating together with industrial leasing firm Bohai Leasing and unnamed existing investors. Its other backers include financial services provider AMD, Tiger Global Management, Northern Light Venture Capital and Max Giant.