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JD Finance Raises Nearly $2 Billion, Doubles Valuation

The financial unit of China's second-largest retailer, JD.com, has doubled its valuation with its latest round of funding from Chinese investors.

CapitalWatch Staff
    Jul 11, 2018 10:45 AM  PT
JD Finance Raises Nearly $2 Billion, Doubles Valuation

The finance unit of JD.com Inc. (Nasdaq: JD) has doubled its valuation today, landing at least 13 billion yuan ($1.96 billion) from Chinese investors, ahead of its potential initial public offering.

JD Finance, an arm of China's tech conglomerate, established its valuation at 120 billion yuan ($18.1 billion) with this latest fundraising round, as reported by Reuters.

CICC Capital, a unit of investment bank China International Capital Corp., brokerage China Securities, private equity firm Citic Capital, and BOCGI, Bank of China's investment arm, were among lead investors in this round.

The final valuation of the company may increase further, as more investors could yet join the fundraising, according to Reuters citing unnamed sources,

The fundraising follows that of the company's rival, Ant Financial Services Group, a financial platform controlled by Alibaba Group Holdings Ltd. (NYSE: BABA). Last month, the FinTech unicorn raised $14 billion in the world's largest single fundraising by a private company, bringing its valuation to $150 billion.

Earlier this year, another of China's giants, Baidu Inc. (Nasdaq: BIDU) raised $1.9 billion for its mobile wallet company, Baidu Financial Services Group, from a consortium led by U.S. private equity firms TPG and Carlyle Group.

Currently, China's mobile wallet market is dominated by Ant's Alipay and Wechat Wallet, run by Tencent Holdings Ltd., with the two services accounting for more than 90 percent of China's market.

JD Finance, which provides consumer credit and wealth management products, is expected to seek a domestic IPO, though the company said it currently does not have a plan to list its shares.

The proceeds from JD Finance's latest fundraising would be used to invest in domestic financial institutions and buy securities and banking licenses, among other areas, as reported by Reuters citing sources.

In mid-2017, JD Finance was valued at approximately 60 billion yuan. The firm separated from its parent company in June last year to obtain licenses for operating certain financial services in China. 

JD gets 40 percent of the restructured entity's pre-tax profit.

The stock of JD was trading at $38.08 per American depositary share Wednedsay afternoon, down more than 1% intraday.

(Reuters contributed to this article)


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