Soul Htite (seated in the center in the above photo) is a very brave entrepreneur that has done something remarkable that very few people have ever attempted and even fewer have succeeded. Soul is the co-founder and former Head of Technology at Lending Club. A few years ago, he chose to walk away from Lending Club to launch a new business. The crazy thing is that he chose to launch his business inside of China without knowing how to speak the language and with only a small handful of connections on the mainland.
China is the place where US Internet companies fail. Amazon and eBay tried to enter only to pull out after being outmaneuvered by local companies (hello Alibaba), Google ran into differences with the Chinese government and chose to exit, and Facebook and Twitter were banned pretty much right from the start. So what was Soul thinking he could accomplish as a foreigner entering China to launch a new Internet Finance company? The odds certainly seemed stacked against him.
Soul has proven everyone wrong and with the two announcements earlier this month, he has elevated his company, Dianrong.com, to a new level as one of the most successful young Internet Finance companies in all of China. So how did he do it?
First of all, he made the decision to personally move to Shanghai and build his business organically from within China, making this a Chinese Internet Finance company not a US Internet company. Second, he took on a co-founder, Kevin Guo, who is native to China and has been a great co-founding partner. Third, he built his entire team in Shanghai with people from around the country. Fourth, he embraced technology with greater than 50% of his employees working as developers and engineers. To cap it off, earlier this month Dianrong.com announced two major partnerships with leading Chinese financial services companies that will transform his business and distribute his P2P technology throughout China.
Bank of Suzhou Partners with Dianrong.com to Launch A P2P Bank
The Bank of Suzhou is a forward thinking bank that serves mid-sized and small businesses and local consumers. The bank has over 260 branches throughout Jiang Su province, which has about 40 million residents. Unlike most Chinese banks that are focused on large businesses and government infrastructure, the Bank of Suzhou is committed to developing capabilities to serve small businesses, which is why P2P technology is important to them.
The Bank of Suzhou has announced that they are setting up a P2P division to serve its small business customers. Dianrong.com will build the P2P platform, provide the technology and related services, and the two companies will jointly operate the P2P platform in order to lend to local small businesses.
Just like we have begun to see in the US, this Chinese banks have realized that P2P technology provides an efficient and low cost way to underwrite smaller sized loans while also providing a superior user experience. In many ways, Dianrong.com continues to follow the Lending Club blueprint and this deal looks very similar to Lending Club’s Union Bank deal.
One of the largest Chinese Wealth Management Firms Invests In Dianrong.com
It was also announced the Sun Hung Kai & Co. Limited (“SHK”) has invested in and has established a long term strategic partnership with Dianrong.com. SHK will combine its 45 years of experience, its expertise as one of the largest lenders in China, and its 180 locations across Hong Kong, Macau, and Mainland China with Dianrong.com’s P2P technology to facilitate “online-to-offline” (O2O) transactions in the regions it currently serves as well as in additional regions across Southeast Asia. SHK plans to use Dianrong.com’s platform to cost effectively expand their business.
Dianrong.com is Quickly Establishing Itself as a Leader in the P2P Industry in China
What Soul has accomplished in China is truly remarkable. As I have mentioned in the past, in a country that has over 1,000 P2P platforms, Dianrong.com is one of only a handful of truly important Chinese P2P companies that are poised to dominate the Chinese market. We think that Dianrong.com is poised to pull away from the pack and emerge as one of the few true leaders in the P2P sector in China.
As a matter of full disclosure, I should mention that we are very close with Soul and the Dianrong.com team. Not only has Dianrong.com spoken at all three LendIt conferences to date in NY, SF and Shanghai, but they also graciously hosted me during my LendIt China trip, introduced me to the Chinese media, and we traveled throughout the country meeting with leading Internet and Finance companies. I had a chance to see firsthand what Soul has built and how they are introducing major innovation to the financial services sector in China that is ultimately benefitting small businesses and consumers throughout China. We wish Soul and Dianrong.com the best of luck and continued success!
