Per the announcement, the asset-backed security facility is an extension and increase of an original USD 250 million deal that FundPark received in 2022, which was led by Goldman Sachs, bringing the total amount to USD 500 million.
The loan spans a period of three years. In an asset-back security facility, the deal is collateralised by a collection of underlying assets. In this instance, these assets encompass FundPark's cash flow, the inventory of its customers and receivables.
FundPark operates its own platform that provides mainly cross-border Chinese mainland small and medium-size ecommerce companies with working capital. This new liquidity is expected to enable the company to provide its existing clients in China with further capital.
For international firms still seeking to tap into the Chinese market, the FundPark deal underscores that pockets of opportunity still exist in the sector, which is valued at more than USD 1.6 trillion globally.
Officials from the fintech expressed that the deal represents exposure to growth and opportunity in Greater China’s new economy sectors, particularly digital small and medium enterprises which have historically been under-banked.
Opportunities for investment
Private credit investors still looking into China are pivoting to opportunities in less levered sectors with better growth prospects, including consumer as well as digital and data sectors.
The popularity of ecommerce in China has made that industry another likely candidate for investors. In many ways, the FundPark deal highlights the importance of Chinese SMEs, even as the economy is not currently in the best position. The new facility loan seeks to enable the fintech to grow its clients’ businesses, while also helping FundPark to expand to new markets like South and Southeast Asia.
Other recent updates from Goldman Sachs
In November 2023, Saudi Arabia-based Tamara
secured USD 250 million in debt financing, a funding round which was led by Goldman Sachs and Shorooq Partners, aiming to optimise its BNPL products and to release new services. The facility consisted of an incremental up to USD 200 million of senior debt which was arranged by Goldman Sachs, as well as a USD 50 million mezzanine tranche, led by Shorooq Partners. According to the press release published at the time, this brought the total senior warehouse facility up to USD 400 million.
In September 2023, Goldman Sachs
entered exclusive talks with a group of investment firms to sell the GreenSky business for USD 500 million. GreenSky is an online lender that works with homeowners looking to make home improvements. Selling the company is in line with Goldman's plans to cut down on its ambitions in consumer banking. The consortium of investment firms that were interested in purchasing GreenSky were Sixth Street, Pacific Investment Management, KKR, and two smaller investors.
