Alibaba Group Holding Ltd. is backing a startup that offers micro loans to students in a big way.
China’s biggest e-commerce company led a US$200 million investment round for Qufenqi which lets university students pay for online purchases in installments.
Ant Financial, Alibaba’s financial services affiliate, said its Alipay online payment unit and its Sesame credit-scoring service plan to work with Qufenqi in growing the business, according to the Wall Street Journal.
Ant Financial declined to say how much the company invested.
Alipay, China’s most widely used online and mobile-payment system, processes most e-commerce transactions on Alibaba’s shopping sites.
This year, Ant Financial broadened its operations by introducing Sesame Credit in January and WeBank, an online bank, in June.
Making microloans to students is a fast-growing segment of China’s online financial services.
Beijing-based Qufenqi, founded in March 2014, faces fierce competition from Shenzhen-based startup Fenqile, backed by Alibaba’s chief e-commerce rival, JD.com Inc.
On Tuesday, Qufenqi posted a statement on its page on WeChat, a mobile social-networking and messaging application, calling the investment round one of the largest for a Chinese internet finance startup.
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