LexinFintech has filed for an IPO on the NASDAQ, planning to raise US$500 million.
The company operates Fenqile, an online retail installment seller (a major competitor of Qudian), Juzi Licai, an online investment platform, and Dingsheng Zichan, which matches customer loans with investors including individual investors on Juzi Licai and institutional investors, such as peer-to-peer lending platforms, commercial banks and other financial institutions. Its funding sources include its own direct lending programs and asset-backed securities (ABS), according to the company.
The company’s targeted customers are educated young adults. It claims over 6.5 million customers with an approved credit line and over 20 million registered users as of September 2017. Active customers were 3 million in 2016 and 3.3 million in the nine months ended September 2017.
It acquires customers online through social referral and cash rewards campaigns and offline by issuing co-branded credit cards with commercial banks. The acquisition cost per customer was 114 yuan, 127 yuan (US$19) and 105 yuan (US$16) in 2015, 2016 and the first nine months of 2017, respectively.
Hawkeye is the company’s in-house developed automated credit assessment and underwriting system that utilizes 5,000 potential data variables and it has developed more than 1,000 decisioning rules. 95% of all loan applications can be assessed and approved automatically within seconds on average, according to the company.
The company’s revenues are from item sales and installment loans. Its financial services income more than doubled year-over-year in the first nine months this year, though the direct sales revenue decreased. It managed to turn a profit in the first nine months of this year.