Ppdai lands USD35 million investment from Alibaba Finance
A report in Chinese was translated by tech news website VentureBest that said financial affiliate of Alibaba Group had committed a USD35 million invested in Ppdai. News of the investment made to the peer-to-peer (P2P) lending industry came from sources who were familiar with the matter. The report came from Chinese website tech.163.com.
The rise in Internet finance was triggered by mutual fund Yuebao. Yuebao is a financial product platform. Yuebao helped spawn other online mutual funds like Rong360, Haodai, Dianrong and CreditEase. However, a series of problems hounded Internet finance such as the high default rate and lack of regulation. As of June this year, Yuebao was still sorting out its paperwork problem with the China Securities Regulatory Commission and vowed to extend its product after sorting it out with regulators.
Although both companies have yet to confirm the report, Alibaba Small and Micro Financial Institute head Chen Dawei earlier said the e-commerce giant would be exploring the P2P industry should the default rate will be lowered.
Last week, chief executive officer Peng Lei of Alibaba Finance said, "There is no restricted zone for us, and our top priority is to cater for the needs of micro and small enterprises."
Ppdai is a social lending site which is the first one in China. The platform created a department dedicated to provide lending services to retailers of Taobao, a subsidiary company of Alibaba and a shopping marketplace targeted for Chinese customers. Ppdai claimed that it has 2 million in registered users for this year, and would record over CNY1 billion or USD163.06 million for 2013. Last December, Ppdai received backing from Sequoia Capital amounting to USD25 million in Series A investment.
VentureBeat noted that since the TaoBao department accounted for over 30% of Ppdai's turnovers, the investment made by Alibaba signaled a need to integrate data and business of both Ppdai and Taobao.