Business / Technology

Tencent's online banking unit to raise $450m, valued at $5.5b

(Bloomberg) Updated: 2016-01-29 07:48

Tencent's online banking unit to raise $450m, valued at $5.5b

Visitors seek information at a Tencent Holdings Ltd stand during the Second World Internet Conference in Wuzhen, Zhejiang province, in December of last year.[Photo/China Daily]

Tencent Holdings Ltd is taking part in a fundraising round for WeBank that will value its online financial affiliate at about $5.5 billion and keep its stake at roughly 30 percent, two sources familiar with the deal said on Wednesday.

WeBank is raising about $450 million via a round that will also include Singaporean state investment company Temasek Holdings Pte and other investors, said one of the sources, who asked not to be identified.

The rapid growth of China's online financial services sector is drawing interest from investors, as a growing crop of startups and Web-oriented services offer credit to smaller companies and individuals under-served by state lenders.

Private equity firm Warburg Pincus LLC is also taking part in WeBank's round, the Wall Street Journal reported earlier.

WeBank and Alibaba Group Holding Ltd-affiliate MYbank are training their sights on an estimated 23 trillion yuan ($3.5 billion) household-loans market that's growing rapidly as more Chinese seek credit.

Online banking is emerging as yet another battleground for Chinese Internet giants Tencent, Alibaba and Baidu Inc, which are competing in everything from on-demand services to media.

Canny Lo, a spokeswoman for Tencent in Hong Kong, declined to comment on behalf of WeBank. Jeffrey Fang, a spokesman for Temasek, said the company does not comment on market speculation.

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