Chinese startup nabs $235m funding to get more people paying in installments

Chinese smartphone users on the subway. Photo credit: Pedro Serapio.

An online store on which shoppers can pay in installments is slowly persuading Chinese people that they don’t need to pay for everything upfront – as is still the norm in the cash-based society.

The startup, Fenqile, which literally means “happy installments”, is focused on college-age youngsters and others with low incomes – anyone for whom it’s a stretch to pay out the full US$1,400 for that funky pink MacBook. The payment can instead be spread across up to two years in monthly payments – making that MacBook an easier US$67 expense each month.

The big investment makes it one of China’s top fintech startups.

The store, which started up in 2013, began by focusing purely on gadgets but it has since expanded to offer clothing, makeup, handbags, and even driving lessons – a hefty expense in China that can run well past US$500 to take the mandated number of practice hours.

Fenqile today announced US$235 million in series D funding to help it grow further, reports 36Kr. The cash comes mainly from Huasheng Capital. A previous investor is Alibaba arch-rival JD, from which the startup sources many of its items.

The sizeable investment makes the online store one of China’s biggest startups in the burgeoning financial technology – or fintech – space. The sector is filled mainly with peer-to-peer lending startups, in which ordinary people serve as investors that can lend to individuals – though those are experiencing a crisis after a string of scandals, shutdowns, and a US$7.6 billion Ponzi scheme.

In the first six months of the year, Fenqile claims its customers snapped up US$1.5 billion worth of products. The startup faces a number of similar sites, one of which is a major rival with a similar name – Qufenqi – that has itself raised nearly half a billion dollars in total venture capital funding.

Source: 36Kr

Converted from Chinese yuan. Rate: US$1 = RMB 6.59.