Alibaba-backed fintech startup gets funding to take small biz loans to China

After dishing out over US$2 billion in loans to small businesses over the past three years, startup lender Qupital has raised by far its largest ever investment – US$15 million – to help it expand from Hong Kong to mainland China.

Focusing on supply chain financing, the service connects firms with professional investors. Qupital says it’s filling a US$200 billion void for Asia’s small and medium-sized enterprises (SMEs) between unpaid invoices and cash in hand.

Andy Chan / Photo credit: Qupital

New Zealander Andy Chan started the business in Hong Kong after seeing no major players doing the same thing in the city. As he explained back in 2017 on The Jay Kim Show podcast:

I started doing research on these different receivables market places around the world and saw that there were some in the UK, Spain, and the US, so that’s when I really thought that there was an underserved market in Hong Kong for SMEs. I have friends and family who work in SMEs in Hong Kong, especially in the trading sector, and they have a lot of long unpaid invoices – 30, 90, 120 days – and we saw that this product could really help these people and help grow their businesses and improve their liquidity in the market.

With Hong Kong being such an important hub for trade, Alibaba in 2017 invested in Qupital’s US$2 million seed round via its Hong Kong Entrepreneurs Fund, and then partnered with the startup a year later so that merchants on Alibaba’s global wholesale marketplace can more easily access loans.

Hong Kong’s International Finance Center / Photo credit: Aotaro

Qupital now aims to open branches in key mainland cities, including Shanghai and Shenzhen, according to its statement today.

The bumper new round was led by CreditEase FinTech Investment Fund, with prior backers Alibaba Hong Kong Entrepreneurs Fund and MindWorks Ventures pitching in.

Beijing-based CreditEase will also lend Qupital some of its wealth management expertise and access to its networks to aid expansion across China.