Briefing: Troubled P2P lender Dianrong looks to raise $100 million
Apr 15, 2019
Dianrong aims to raise $100m to cope with peer-to-peer crackdown – Financial Times
What happened: Chinese peer-to-peer (P2P) lender Dianrong, is aiming to raise $100 million from new investors as well as existing shareholders, which includes Singapore’s sovereign wealth fund GIC, Japanese financial services group Orix, and Standard Chartered’s Asian private equity arm. To reassure investors during the ongoing regulatory crackdown on P2P lending, Dianrong co-founder Guo Yuhang said he put $10 million of his own money into the company at the end of December.
Why it’s important: Dianrong, one of the largest P2P platform in China, has been in crisis mode over the past few months. The online lending sector has been in turmoil since regulators began clamping down on the risky financial practices and fraud activities, which has led to the collapse of many platforms. In March, warning signs of Dianrong’s financial troubles became apparent when the company decided to slash up to 2,000 jobs and shutter around two-thirds of its offline branches. Around the same time, former employees accused the company of falling behind on wages and severance pay.