Fenqile, a Shenzhen-based online shopping platform that lets users purchase consumer products in installments, is planning to raise around US$600 million via an initial public offering (IPO) on a U.S. stock exchange later this year.
The funding raised from selling shares would give Fenqile more capital to compete with its biggest rival Alibaba-backed Qufenqi which is also planning an IPO at a U.S. exchange.
Fenqile backers include China Renaissance Partners’ venture arm – Huasheng Capital, Russian investment company DST Global and Bertelsmann Asia Investments, among some.
Founded in 2013 by former Tencent Holdings Ltd executive Xiao Wenjie, Fenqile which literally means “Happy Installment Payments” in Chinese, targets young Chinese consumers – especially university students who are eager to buy consumer products but do not have the capability to pay in full.
With their interests in mind, the platform provides an installment payment method for popular consumer products ranging from mobile phones to concert tickets.
According to its website, in 2015, the company claims that its user base had reached 10 million registered users with a revenue sum of RMB10 billion (about US$1.45 billion).
While in January, the startup has also recruited Zeng Yan as its chief financial officer, reportedly to be in preparation for the company’s U.S. IPO.
China’s e-commerce is expected to be the main driver of the increased consumption in China, supported by the growth of online shopping in third- and fourth-tier cities. According to estimates from Shanghai-based consultancy iResearch, the revenue from China’s Internet economy will reach RMB2.68 trillion yuan (about US$387 billion) in 2018.
By Vivian Foo, VCNewsNetwork
This news is published on Reuters.