China Rapid Finance (Pending:Â XRF), a Shanghai, China-based peer-to-peer (P2P) lender, has announced its terms for its upcoming IPO.
The company plans to raise $105 million through the offer of 10 million shares priced between $9.50 and $11.50 per share. Assuming the company prices at the midpoint of its price range, it would have a market cap value of $602 million and trade at a price/sales multiple of 10.5x.
Company Overview
China Rapid Finance was founded in 2001 as a consumer lending marketplace geared toward China’s emerging middle class. The company’s target demographic is well-educated, employed mobile users who are between the ages of 18 and 29 and living in urban cities. This emerging middle class mobile active (EMMA) demographic often have difficulty getting loans from banks as they lack credit history. The EMMA demographic is estimated to include more than 500 million people.
The company markets itself as the first company to partner with major Internet platforms in China in order to recognize, choose and contact creditworthy EMMAs using a number of data channels. Using these channels, the company can acquire customers at a lower cost than other comparable online P2P lenders.
The core of the company’s platform is its technology for predictive selecting and automated deciding, which ultimately streamline the selection and loan application processes for potential borrowers. In turn, investors benefit from better risk-adjusted returns. According to the company, it has served more than 1.4 million borrowers and assisted with the facilitation of more than 10 million loans as of December 31, 2016.
China Rapid Finance offers consumption loans and lifestyle loans. Consumption loans have terms between two weeks and three months, and range for RMB500 to RMB6,000 (approximately $72-$865 USD). Lifestyle loans have terms of between three months and three years, and principal amounts between RMB6,000 to RMB100,000 (approximately (approximately $865-$14,400).
