Hong Kong fintech startup Qupital has obtained USD$15 million in Series A round financing to improve its supply chain finance offering and drive expansion into mainland China.
The Series A round investment was led by CreditEase FinTech Investment Fund (CEFIF), with investors Alibaba Hong Kong Entrepreneurs Fund and MindWorks Ventures also participating after serving as investors in the seed round two years ago.
Qupital was founded in 2016 and bills itself as Hong Kong’s largest trade financing platform for SME’s, catering in particular to small businesses who meet with cash flow problems while waiting for the payment of invoices.
The company provides loans that are equal to most of the value of an invoice as well as connects borrowers with cash-providers, earning money in the process by charging a fixed percentage service fee of the total invoice value as well as reaping a percentage of the net revenues for investors.
The company says it has processed around 8,000 transactions worth a total of HKD$2 billion.
Qupital plans to use the $17 million in funding raised to date to expand its supply chain financing products and increase its tech R&D and risk management personnel with the launch of a new tech centre for the Greater Bay Area of Guangdong, Hong Kong and Macau.
The Hong Kong fintech startup also plans to launch operations in mainland Chinese cities including Shanghai, Hangzhou, Guangzhou and Shenzhen.
Strategic investor CreditEase is well positioned to help Qupital expand into the mainland market, given that it is a leading provider of loans and other financial products to Chinese small businesses.
The move comes just as Beijing launches a drive for greater financial inclusion and increased lending to Chinese small businesses, amidst broader efforts to keep the economy on an even keel.
“The growing volume of SME and cross-border trading drives a huge demand for alternative financing for SME’s who are underserved in the market and opportunities for investors to earn a decent risk-adjusted return,” said Dennis Cong, CEFIF managing director, in a statement.
“We look forward to working with Qupital to broaden its sources of capital base and create unparalleled investment opportunities for CreditEase.”