DST-Backed Chinese Startup Fenqile Said to Plan $600 Million IPO

  • Hybrid of e-commerce, consumer finance plans 2017 share sale
  • Website targets university students eager to shop online

Fenqile, a Chinese online shopping mall that lets users pay in installments, is planning a U.S. initial public offering that could raise about $600 million, according to people with knowledge of the matter.

The Shenzhen-based startup, founded by former Tencent Holdings Ltd. executive Xiao Wenjie, could list as soon as this year, according to the people, who asked not to be identified because the information is private. Fenqile, which means “Happy Installment Payments” in Chinese, targets university students who are eager to buy consumer products yet can’t afford to pay in full.

Selling shares would give Fenqile, which is backed by Russian billionaire Yuri Milner’s DST Global, more funding to compete with rivals like Qufenqi, whose investors include Alibaba Group Holding Ltd.’s finance affiliate. E-commerce is expected to be the main driver of increased consumption in China, supported by the growth of online shopping in third- and fourth-tier cities, according to Shanghai-based consultancy iResearch.

Revenue from China’s internet economy will reach 2.68 trillion yuan ($387 billion) in 2018, from 1.11 trillion yuan in 2015, iResearch estimates show. Fenqile didn’t immediately respond to emails seeking comment.

Chinese e-commerce operator JD.com Inc. and China Renaissance Partners are also among investors in Fenqile. It most recently received $235 million in a private fundraising round in June 2016, the company’s website shows.

Fenqile, which sells products ranging from laptop computers to concert tickets, has more than 10 million registered users and had 10 billion yuan of revenue in 2015, according to its website.