Li Ka-shing-backed fintech firm WeLab files for Hong Kong IPO

WeLab founder and CEO Simon Loong. Photo: WeLab's LinkedIn page

Hong Kong-based WeLab, the mobile lending platform operator backed by billionaire Li Ka-shing, has filed for an initial public offering on the Hong Kong Stock Exchange as it actively seeks to expand in Southeast Asia.

Its filing did not disclose the number of shares it plans to offer and the total amount it intends to raise but earlier reports hinted that WeLab, founded in 2013, seeks to raise $500 million through an IPO.

The company said it intends to use the net proceeds of its listing to fund business development initiatives, enhance research and technology capabilities, and for other working capital and general corporate purposes.

In its filing, WeLab said it is the only online consumer credit platform with a significant presence and leadership in both China and Hong Kong.

It currently operates two largest online lending platforms in China and Hong Kong, Wolaidai and WeLend. The company is also planning a foray into the under-tapped insurance services space.

“We create game-changing technology for consumers and financial institutions that make financial services more convenient and inclusive,” the company said in its filing.

Its total revenue increased from $2.2 million in 2015 to $30.3 million in 2016 and $155.1 million in 2017, representing a compound annual growth rate of 742.2 per cent. It recorded a net loss of $13.5 million and $24.8 million in 2015 and 2016 respectively, and a net profit of $17.7 million in 2017.

In 2017, 42.9 per cent of its revenue came from loan facilitation services, 37.6 per cent from credit service income and 10.2 per cent from interest income.

In 2016, the company raised $160 million in a Series B financing led by Khazanah and joined by ING Bank and Guangdong Technology.

The Series B followed the completion of a $20-million Series A round in January 2015 from a group of strategic and financial investors, including CK Hutchison’s TOM Group and Sequoia Capital, which enabled WeLab to launch new products in mainland China.

The company seeks to expand in Southeast Asia at a time when the fintech landscape in the region is increasingly being explored by Alibaba and other players who are enticed by the opportunity presented by a market with over 600 million users, a high mobile internet penetration, and a large unbanked and under-banked population.

“We find that in some of the Southeast Asian markets we can utilise the same technology that we have… A lot of these markets are well penetrated and growing as fast as China and going through the financial inclusion problem. We are looking at how to identify good partnerships,” WeLab founder and CEO Simon Loong told DEALSTREETASIA in an earlier interview.

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