Chinese P2P lender Dianrong announced Thursday that it has raised new capital in a funding round led by Standard Chartered Private Equity (SCPE).
Affirma Capital, a private equity firm spinout of SCPE, and Dianrong’s existing shareholders including ORIX-backed Dalian Financial Industry Investment Group (DFIIG) also participated in the round, according to a company statement sent to TechNode.
The Shanghai-based online lender did not disclose the amount raised in the new round. However, in April, it was reported that the company was seeking to raise $100 million in a new round of funding. Guo Yuhang, the company’s co-founder, revealed at the time that he put $10 million of his own money into the company at the end of December to help the company weather the regulatory storm.
The new capital will be used to boost the company’s registered capital and develop new business models, a company spokeswoman told TechNode. Dianrong will adjust its business structure as it shifts its focus from offline to online, she added. The company will also increase its registered capital from the current RMB 300 million ($43.81 million) to the minimum RMB 500 million required by regulators. The new registered capital requirement set by Chinese regulators is part of a pilot program to register the country’s surviving P2P lending platforms in a national monitoring system, which could be rolled out in the second half this year.
“The internet finance industry is currently undergoing a reshuffle,” Guo said in the statement. “In the face of constant market and regulatory changes, our directors are constantly adapting to the new regulations and tweaking the company’s development strategy,” he added.
In March, Dianrong announced that it was shuttering 60 of its 90 brick-and-mortar outlets and laying off as many as 2,000 employees. At the time, Guo blamed the company’s slowing growth in the past two years on the changing regulatory environment and unclear policies.
The company’s last completed funding round was in August, in which it raised $40 million from DFIIG.
China’s P2P lending sector had been growing nearly unregulated for years before authorities began implementing clear rules. The clampdown on fraudulent and risky financial practices began in 2016, which decimated the industry, forcing the closure of more than half of the P2P lending platforms in the country.