Chinese Loan Platform Files for $100M U.S. IPO

© Can Stock Photo / yuyu2000

Weidai Ltd., a title lender that provides small businesses with credit backed by auto loans, has filed for an initial public offering to raise $100 million, according to an SEC filing.

Weidai is a peer-to-peer lender with an early-stage personal credit system wherein users can borrow from the platform with their automobiles as collateral. The site also provides unsecured cash lending and financing for car purchases. It is the largest auto-backed financing solution provider in China in terms of loan volume from 2015 to 2017 with a market share of approximately 35% in 2017, according to the SEC filing.

The company filed confidentially on May 25, 2018 and made the filing public last week. Morgan Stanley, Credit Suisse, and Citi are the joint bookrunners on the deal, but no pricing terms have been disclosed.

“The primary purposes of this offering are to create a public market for our shares for the benefit of all shareholders, retain talented employees, and obtain additional capital,” the company said in the filing.

Weidai grew its portfolio of loans backed by automobiles to $2.6 billion during the second quarter. The lender also grew its net revenue from auto-backed loans to $201.8 million compared with $175.9 million the same time the year prior.

Founded in 2011, Weidai has also grown its portfolio of unsecured loans, some of which are used for auto financing. The company’s balances of unsecured loans totaled $356 million at the end of the quarter, up from about $58 million the year prior.

Title lending services are especially important in China because small and micro enterprises face difficulties including “limited access to banks and other traditional financing channels, high costs of alternative lending channels, and the uncertainty of funding from families and friends,” the company said.

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As Associate Editor of Auto Finance News, Matt Wood reports on the latest developments and trends of the auto and powersports finance world, from innovation to compliance. He's also a movie/TV show buff and is willing to argue about Lost anytime. Former bylines include Scout Media and CinemaBlend.