JD.com's Finance Unit Raises $2bn, Doubles Valuation: Sources
JD.com, Inc.'s finance arm has raised at least 13 billion yuan (€1.67 billion) in fresh equity from Chinese investors, doubling its valuation ahead of an expected initial public offering, said people with direct knowledge of the matter.
The fundraising underscores investor enthusiasm for big, privately held Chinese technology companies, even as public valuations falter. This week, smartphone maker Xiaomi completed the world's largest tech IPO in almost four years, but it saw its shares fall on debut in Hong Kong, even after pricing its deal at the low end of its offered range.
JD Finance's fundraising round, which kicked off late last year, establishes its valuation at 120 billion yuan, the sources told Reuters.
The valuation is double the roughly 60 billion yuan that JD Finance was estimated to be worth after it split from JD.com, China’s second-largest e-commerce firm, in mid-2017.
More investors could yet join the fundraising, said one of the sources, meaning that JD Finance's final valuation may rise further.
Big investors in this round include CICC Capital, a unit of investment bank China International Capital Corp (CICC), brokerage China Securities, private-equity firm Citic Capital, and BOCGI, Bank of China's investment arm, the sources said.
JD Finance said that the fundraising has yet to be completed and declined to comment further. CICC and China Securities also declined to comment. Citic Capital and BOC didn't respond to requests for comment.
JD Finance's fundraising follows that of Ant Financial, the affiliate of its arch rival, Alibaba, which last month was valued at $150 billion, when it raised $14 billion in the world's largest-ever single fundraising by a private company.
The investments suggest that investors remain keen to put money into online payments and lending services in China, especially those backed by large companies such as Alibaba and JD.com, which already have stable user traffic. JD.com itself is backed by US retail giant Walmart, Inc. and Chinese gaming behemoth Tencent.
JD Finance, whose financial offerings include consumer credit and wealth management products, is expected to seek a domestic initial public offering at some point, although there is no firm timetable for a listing, according to the sources.
JD Finance said that it currently doesn’t have an IPO plan.