Alibaba Group Holding Ltd is teaming with LendingClub Corp to offer financing to US businesses to buy from Chinese suppliers, hoping to make it easier for American firms to tap into the world’s largest economy.
LendingClub, an eight-year-old San Francisco startup, said it will provide its core service of matching small business borrowers with lenders on Alibaba.com, the Chinese company’s global wholesale platform.
In the exclusive arrangement, LendingClub becomes the main source of US buyer financing on Alibaba.com. It will offer loans of up to US$300,000, typically for a few months, at rates of 0.5 percent to 2.4 percent — a fraction of the double-digits that credit cards incur.
Photo: Bloomberg
“They were looking for a technology-aware platform and also a partner that can operate at a low cost, so that the cost of credit for US buyers would be lower,” LendingClub founder and CEO Renaud Laplanche told reporters.
Alibaba derives the lion’s share of its revenue from retail platforms Taobao and Tmall. However, it got its start supporting small businesses with Alibaba.com, which Jack Ma co-founded out of his Hangzhou apartment in 1999.
The service is used by businesses on the lookout for cheap products. Alibaba posted revenue of US$631 million in international wholesale commerce in the year to March 2014, a sliver of the US$8.5 billion in revenue over the same period.
Alibaba intends to grow its US footprint by connecting American sellers with increasingly affluent Chinese buyers. It is also trying to aid smaller businesses and merchants, an effort analysts say earns it goodwill while laying the foundation for a longer-term expansion.
The Chinese company settled on LendingClub because it found its platform faster and easier to use than a traditional bank. The startup, which has provided about US$6 billion in loans since its 2007 inception, is capable of keeping up with demand, Alibaba.com Global Marketing director Michael Lee said.
“They’re capable of providing an instant approval decision ... that a traditional bank may not be able to. This is really critical to the borrowers,” Lee said.
The lending risk will be borne by its pool of institutional investors including foundations, endowments and pension funds.
Laplanche said the short-term nature of the envisioned loans, typically six months, tended to reduce overall risk.
Alibaba will now look for similar providers to extend financing beyond the US to major markets such as Britain, Australia, Germany and Canada, Lee said.
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
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
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
RSS