Soon, another IPO billionaire in China

Founder of online lender worth at least US$1.2b after US listing

BEIJING • Surging valuations for Chinese fintech start-ups are about to turn micro-lending tycoon Min Luo into the country's latest IPO billionaire.

Mr Luo, 34, founder and chief executive officer of online loan provider Qudian, owns about a fifth of the company, which hopes to raise as much US$825 million (S$1.12 billion) in a US initial public offering this month.

The price range values the business at a minimum of US$6.3 billion based on the shares it will have outstanding after the offering, and gives Mr Luo a net worth of at least US$1.2 billion, according to the Bloomberg Billionaires Index.

China attracted the lion's share of the US$10.2 billion in venture capital that flowed into fintech businesses globally through September last year, a Citigroup report found. Chinese companies received 46 per cent of that funding in the same period, putting them ahead of their US peers, which captured 56 per cent of the funding during all of 2015.

Mr Luo, who founded two other websites and received a bachelor's degree from Jiangxi Normal University in 2004, formed the fintech business three years ago. Qudian targets the millions of young people in China underserved by financial firms and in need of credit for discretionary spending.

The company makes its loans almost entirely via mobile devices. Qudian representatives did not respond to requests for comment.

In the first half of this year, the Beijing-based business was China's leading provider of consumer credit online, according to a report from consultant Oliver Wyman that was commissioned by the company. Qudian handled 38.2 billion yuan (S$7.9 billion) in transactions for seven million active borrowers in that period, the firm said in its IPO prospectus.

Nearly 60 per cent of its transactions in 2016 had annualised interest rates above 36 per cent. The company had revenue of 1.44 billion yuan in 2016, a 514 per cent increase from the year before.

The Qudian offering follows the IPO for ZhongAn Online P&C Insurance, a consumer insurer selling policies that protect everything from smartphones to cars.

ZhongAn shares jumped as much as 18 per cent on the first day of trading late last month. The company's market capitalisation was US$16.8 billion yesterday, more than 10 times its book value.

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A version of this article appeared in the print edition of The Straits Times on October 11, 2017, with the headline 'Soon, another IPO billionaire in China'. Print Edition | Subscribe