Why he walked away from a $400k annual income to start his own fintech startup

Photo credit: allensima / 123RF Stock Photo.

Last year, Fang Guosen was working in Hong Kong as a director of a traditional financial services company. This year, after walking away from a US$400,000 annual income, the 33-year-old is in Shenzhen serving as the CEO of Linghui, a financial technology company (fintech or “jīnróng kējì” in Mandarin).

Believing that the financial services industry was being disrupted, he left his secure position to wager on himself and the budding fintech industry. “Fintech is a new thing,” Fang said. “Three years from now, everyone will understand internet finance […] Fintech technology allows for fast product innovation. Also, it has a lower barrier to entry so we think this market change is obvious.”

Many fintech companies are retail focused and are altering how customers pay bills, transfer money, invest savings, borrow capital, and carry out other financial activities. Companies such as Linghui, however, assist existing financial services companies to become more efficient, reduce expenses, and better serve their own retail clients.

According to Fang, traditional financial services are lagging behind fintech.

What does Linghui do?

Linghui is a financial services supermarket offering various investment solutions such as mutual funds, private equity funds, stocks, bonds, currency funds, and insurance products.

Employing SaaS (software as a service), Linghui focuses on helping small and mid-sized financial intermediaries with operational functions. It facilitates transaction processing, generating reports, information dissemination, risk management, compliance adherence, investment research, big data analysis, and client relationship management.

Bringing financial knowledge to smaller cities

Mosso Lau, CEO of FinPlus, a fintech venture capital company that invested in Linghui, said the company can address the many longtail prospects and clients located in China’s smaller cities and remote regions. “The residents of tier two, three, and four cities can now manage their money through apps,” he said.

He cited the example of a peasant farmer living in Northeast China who is unfamiliar with the concept of investing. According to Mosso, Linghui hopes it “can introduce financial product knowledge to countless Chinese.” Likewise, the company also assists Chinese citizens who move to foreign countries with cross-border investments.

Historically, it was cost prohibitive for financial services companies to reach these clients, but by moving these processes online, it is possible. Linghui, for example, can link a broker in Shanghai with a client in faraway Ürümqi. “This has a very big impact on communication,” Fang remarked. “Before, they did not have this type of sales product.”

Making a big change

Founded in August of last year, Linghui has 50 employees today. Although the company has experienced success and is rapidly expanding, Fang said it was a very big challenge leaving a comfortable, highly lucrative position to enter the riskier, nascent fintech space.

it was a very big challenge leaving a comfortable, highly lucrative position to enter the riskier, nascent fintech space.

When funding Linghui, Mosso was impressed by Fang’s industry experience.

Fang, a Chaozhou native who studied electronics and economics at South China University of Technology, lived in Hong Kong for more than two years prior to founding Linghui. There, he established operations and became the office head for a large mainland Chinese securities brokerage firm.

Future possibilities in the market