Asia’s financial tech platform Qupital announced earlier this week that it acquired $150 million in a combination of Series B equity funding and “a receivables-backed securitization facility.”
The equity funding will aim to support Qupital’s goal to scale its cross-border digital commerce lending business into global markets and enhance its technological capabilities, while the facility will offer a lower cost of funding for Qupital to provide “exclusive products to its present and future clients.”
As explained in a release, the securitization facility entered with investment bank Citi, supported by Integrated Alternative Credit Fund, “marks the first e-commerce merchant financing securitization in Asia.”
The announcement also mentioned that this “coincides with the closing of Qupital’s Series B round, led by the Greater Bay Area Homeland Development Fund (GBA Homeland), with additional capital injections from investors including the Innovation and Technology Venture Fund (ITVF) of the Hong Kong SAR Government, MindWorks Capital, Silverhorn and Alibaba Entrepreneurs Fund.”
As mentioned in the release, Qupital aims to leverage “the power of sales data to streamline credit underwriting for sellers on e-commerce platforms such as Amazon, eBay, Lazada and Shopee, offering a win-win solution to both sellers and investors.”
The platform “empowers creditworthy merchants that are traditionally underserved in the commercial lending market, and hews out an alternative asset class with attractive yield opportunities for both professional and institutional investors.”
As of October 2021, Qupital has achieved more than $500 million in loan advancement “to some 7,000 merchants onboarded on its digital platform, tracking an annualized gross merchandise value (GMV) of over US$3 billion,” the update revealed.
As stated in the announcement, Qupital’s strategic placement within the GBA Homeland portfolio “more importantly reflects the depth and breadth of its integration into the GBA ecosystem.”
As a “global-scale” alliance committed to supporting the new economy in China’s GBA, GBA Homeland’s established network “serves as a springboard for Qupital to augment local partnerships and on-the-ground knowledge to assist further expansion in the GBA and Greater China.”
With China cross-border e-commerce “sustaining a 20% year-on-year growth,” the rapid industry expansion “renders extra confidence for Qupital to grow its customer base beyond its existing force which concentrates in Guangzhou and Shenzhen,” the update noted.
UK-based Nordstar’s digital commerce focused fund “joins the round as a new investor”. As a leading investment adviser focusing on global growth and scaling, Nordstar will “lend its network to broaden Qupital’s customer base in Western markets and share the team’s expertise to expedite the company’s global expansion,” the update revealed.
The majority of funds raised will be “used to accelerate Qupital’s core lending business to support e-commerce sellers.” The release further noted that “as part of its five-year plan, the company is set to tap into its abundant network and grow its “buy now, pay later” product model to build an all-encompassing marketplace tailored for B2B transactions.”
It will “assign resources to enhance its R&D capabilities in terms of artificial intelligence, big-data technology and MLOps,” the update confirmed while adding that the firm has “plans to extend its footprint across mainland China, as well as international markets including Southeast Asia, North America and Europe.”
Winston Wong, Co-Founder and Chief Executive Officer of Qupital, stated:
“The GBA comprises multiple world-class manufacturing bases, where goods are produced and capital needs arise; this is where we step in as a solution to bridge the financing demand gap. It also reaffirms the unparalleled role of Hong Kong as an international financial hub – where innovations are met with opportunities to flourish. We believe Hong Kong will continue to play an indispensable role within the GBA as a financial powerhouse.”
Andy Chan, Co-Founder and President of Qupital, remarked:
“As we aspire to improve financial inclusion and increase global trade ultimately, we are committed to back SMEs that have limited access to capital. Being able to work with Citi on this credit facility has fueled our business with a stable pool of funds and improved cost of capital. It is the cornerstone for us to sharpen our product features, build exclusive relationships with clients and win over market share to gain even stronger foothold in the global market.”