HK-based fintech startup Qupital raises $150m to expand footprint

Qupital, a Hong Kong-based fintech startup that offers cross-border e-commerce financing, has secured $150 million to expand its business in international markets and lift technological capabilities.

The startup raised fresh capital through a Series B round of equity financing and a receivables-backed securtisation facility, it said in a statement on Tuesday. The facility will provide a lower cost of funding for it to offer exclusive products to existing and future clients.

The Series B round was led by the Greater Bay Area Homeland Development Fund (GBA Homeland). The Innovation and Technology Venture Fund (ITVF), a HK$2-billion ($257 million) fund set up by the HK government in 2017; HK-based venture capital (VC) firm MindWorks Capital; Asian multi-asset investing solutions provider Silverhorn Group; and Alibaba Entrepreneurs Fund (AEF), which is backed by e-commerce giant Alibaba, participated in the deal.

The $150-million funding also covers a credit securitisation facility from global investment bank Citi, supported by Integrated Alternative Credit Fund. Qupital said that it marks Asia’s first e-commerce merchant financing securitisation.

Qupital’s co-founder & president Andy Chan (left) and Winston Wong (right), the firm’s co-founder and CEO. Source: Qupital

Global expansion plans

Qupital, which uses big data and machine learning to streamline credit underwriting for e-commerce merchants, mopped up the fresh capital to fuel its global growth with a focus on southern China’s Greater Bay Area (GBA).

The five-year-old startup expects to leverage GBA Homeland’s network in the GBA, a region consisting of HK, Macau, and nine cities in Guangdong, as “a springboard” for it to augment local partnerships and on-the-ground knowledge. It plans to serve customers across GBA cities beyond its currently focused Guangzhou and Shenzhen.

“The GBA comprises of multiple world-class manufacturing bases, where goods are produced and capital needs arise; this is where we step in as a solution to bridge the financing demand gap,” said Winston Wong, co-founder and CEO of Qupital, in the statement.

UK-based investment adviser Nordstar, which backed the Series B round as a new investor, will help Qupital expand its global footprint.

Outside of Greater China, Qupital plans to raise its stakes across SE Asia, North America, and Europe. It expects to triple the team size by 2022 to support expansion needs.

Photo from Qupital’s official website.

Founded in 2016, Qupital offers financing to creditworthy merchants on e-commerce platforms such as Amazon, eBay, Lazada, and Shopee who are traditionally underserved in the commercial banking market. As of October 2021, it has recorded over $500 million in loan advancement to some 7,000 merchants onboarded on its digital platform.

The majority of funds raised will be used to accelerate Qupital’s core lending business to support e-commerce sellers. The startup also plans to assign resources to enhance its R&D capabilities, focusing on the application of artificial intelligence (AI), big data, and MLOps, or machine learning engineering for production.

Prior to the new financing, Qupital announced in March 2019 the completion of a Series A round at $15 million led by CreditEase FinTech Investment Fund. Alibaba’s AEF and MindWorks Capital, which backed its seed round in 2017, re-upped in the deal.

Read More: HK-based fintech startup Qupital raises $150m to expand footprint

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