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Northern Light Venture Capital backs Chinese online lending platform Dianrong

8 Jan 2014

Chinese VC firm Northern Light Venture Capital (NLVC) has invested “tens of millions of dollars” in Shanghai-based online financial services firm Dianrong.com.

Following its founding in 2012, Dianrong.com has become a fast-growing peer-to-peer lending website since going live in March 2013. As of the end of November 2013, the firm had achieved an aggregate trade turnover of more than RMB100m ($16.5m).

Northern Light Venture Capital managing director Yang Ruirong said, “We have been keeping a watch on the development of the internet finance industry. The rapid development and adoption of internet technology have made inclusive finance a possibility. As an important part of internet finance, P2P has to some degree filled the financial service gap and further improved the financial system.

China’s P2P market, now estimated at RMB20bn ($3.3bn) to RMB40bn ($6.6bn), is far from huge. Meanwhile, we notice that the industry is growing at an annual rate of more than 300 per cent and is on track to witness explosive growth during the next five to ten years.”

Yang added, “Dianrong.com is a secure investment platform with stable returns and high liquidity. With the improvement of China’s ability to conduct standardized credit background checks, implementation of regulations and the industry itself, such a sophisticated and strong P2P platform will no doubt go further.”

Dianrong.com CEO and founder Soul Htite said, “China’s fast growing and rapidly changing economy represents the perfect environment for modern business models empowered by technology to be quickly adopted. For instance, China is home to 42 million SMBs representing 99 per cent of the country’s enterprises. They contribute to 60 per cent of the GDP and 50 per cent of tax revenue and still only ten per cent of them will receive funding from banks.”

Since public launch in March 2013, the Dianrong.com platform has yield an overall portfolio return of 16.7 per cent after fees.

Founded in 2005, NLVC has backed more than 80 companies, and manage approximately $1bn in committed capital with three dollar funds and three RMB funds. The firm is headquartered in Hong Kong, with offices in Beijing, Shanghai, Suzhou, Shenzhen and Menlo Park.

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