Startup WeLab raised US$14M from Sequoia and Hong Kong tycoon
HONG KONG – WeLab Holdings, an Internet finance start-up in Hong Kong, said on Monday that it had raised $14 million from Li Ka-shing, Asia’s richest man, and Sequoia Capital, a stalwart of Silicon Valley.
In a deal that highlights the strong demand among investors for the Chinese Internet sector, WeLab said it would use the cash to finance a push into mainland China, where it plans to bring “big data” to finance, employing vast amounts of information to help companies better evaluate and price their credit risk. WeLab did not disclose any stake amounts or valuations of the company based on the latest fund-raising.
The financing round is a so-called Series A investment, the first attempt to raise money after WeLab’s initial solicitation of seed capital when it started up a year ago. It secures backing from Mr. Li’s TOM Group, which invests in the media and Internet businesses and has a joint venture e-commerce business with mainland China’s postal service operator.
Sequoia Capital is one of the most active venture capital firms in China, having invested in more than 100 Chinese companies, including JD.com, the online retailer that last month raised $1.78 billion in an initial public offering in the United States.
“As we look beyond WeLend.hk, we are particularly excited by the network of our strategic investor, TOM Group, to facilitate our fast expansion into mainland China, greater China and Asia,” said Simon Loong, a longtime banker at Standard Chartered and Citigroup in Hong Kong, Taiwan and Singapore who founded WeLab last year and serves as its chief executive.
Ken Yeung, chief executive of the TOM Group, said in a statement: “We are very excited about WeLab’s cutting-edge risk and fraud control technology, which has the ability to leverage big data, a massive untapped opportunity in the region.”
Until now, WeLab’s core business has been WeLend.hk, Hong Kong’s first peer-to-peer online lending business. WeLend has attracted 6,000 members and loan applications from consumers totaling more than 400 million Hong Kong dollars, or over $50 million.
Tech start-ups are common in mainland China, with its freewheeling entrepreneurial spirit and millions of university graduates, and also in Singapore, where such companies enjoy a number of government incentives. But in Hong Kong, a city of seven million, they tend to be crowded out by a limited talent pool, some of the world’s highest office rents and the monopoly-like status of the biggest players in many sectors of the domestic economy.
WeLab has its sights set on the much larger market in mainland China, where it plans to concentrate on financial technology rather than the microlending sector, which in China is crowded with state banks, private money lenders and larger Internet groups like Alibaba.
This article originally appeared in The New York Times