Chinese peer-to-peer lender and broker Lufax is seeking to raise about US$1 billion in a round of funding that would value the company at between US$15 billion and US$20 billion, according to a person familiar with the matter.
The Shanghai-based company has begun approaching possible investors and wants to finish by early next year, said the person, who asked not to be named because the matter is private.
Ping An Insurance Group Co (中國平安), the company’s biggest shareholder, is not planning to participate in this round, the person said. There is no guarantee Lufax will be able to raise all the money, and any deal might not be completed. Lufax was valued at US$10 billion in March, when it raised US$500 million in a private placement.
China’s finance sector is going through sweeping changes after years of government control, with new entrants such as Lufax and Baidu Inc (百度) introducing innovative and lower-priced services.
“The advantage Lufax has is its technology on the back end, it is sophisticated and mature,” said Zennon Kapron, managing director of the Shanghai-based consultancy Kapronasia.
Run by former McKinsey and Co consultant Gregory Gibb, Lufax would be the most valuable financial start-up in the world at its proposed valuation, according to a database by CB Insights.
A spokeswoman for Lufax declined to comment. A spokeswoman for Ping An said the company makes no comment on market talk.
There are 3,769 peer lending platforms in China that have lent 8.3 billion yuan (US$1.3 billion) to 16 million people, according to Yingcan Group (盈燦公司), a Shanghai-based consultancy. About a third have some sort of financial trouble, according to Yingcan’s November report.
The biggest threat to Lufax will come from technology giants Baidu, Alibaba Group Holding Ltd (阿里巴巴) and Tencent Holdings Ltd (騰訊), which are all moving to open their own banks, sell wealth management products and offer other financial services, Kapron said.
Lufax might have an advantage because of its experience in building up credit and risk management from its loan portfolio, Kapron said.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure