TULIU.com Completes RMB 150 million Series B Financing as Investment in China's Land Transfer and Land Finance Industries Increases

In order to tackle the most serious land transfer problems in China, TULIU.com tried to replace mortgaged loans based on land management rights with an innovative internet mode. In this way China's farming efficiency may be improved, and TULIU.com can assist farmers with agriculture in rural areas.

Tens of Billions of Yuan of Land Transfer Backed by Capital Tycoons

Following Shanda Capital's injection of RMB50 million during Round A financing in 2014, TULIU.com was this time also favored by capital tycoons Guo Guangchang and Shao Yibo, showing that experts in the industry is beginning to take off.

Public data shows that the value of the transferrable land in China's rural areas is around RMB100 trillion, consisting of RMB40 trillion farming land, RMB20 trillion woodland, and RMB40 trillion rural residential land. As transparent land transfer policies continue to be introduced, such 'sleeping giant' capital has gradually been released.

The Report on the Work of the Government released following the closing of the "two sessions" in 2016 says that "the government will promote the development of suitably scaled-up agricultural operations in diversified forms; improve policy support for family farms, large and specialized agricultural family operations, farming cooperatives, and other emerging forms of agribusiness; and will encourage farmers, on a voluntary basis and in accordance with relevant laws, to transfer the land they contract to work on in return for compensation, enter into cooperation or association based on land as shares, or place their land under trusteeship."

Investment institutions have responded quickly, with Shineng Capital, which provides financial consultancy for TULIU.com, expressing that land reform is an important part of the state's deepening reforms in an all-round way and may be gradually stimulated by dividend policies during the development.

Land reform experience of the United States and Japan suggests that clear definition of land property rights and formation of a land transfer market will increase the value of land resources, for example, the annual growth rate of the value of farm land in the United States increases at around 14% year on year.

TULIU.COM Takes the Lead in Cooperating with the Government

Led by CEO Wu Yong, TULIU.com was put into operation in June 2009. In April 2012, the first offline land service company of TULIU.com was established in Zhenzhou. On one hand,

TULIU.com has focused on the one hand on publishing enormous amounts of information about land transfer and on the other in training land brokers on knowledge about related laws and policies,  accurately measuring land, and cooperating with professional institutions on monitoring land indexes like pH value.

Through its professional offline company and internet platform, TULIU.com has improved the land utilization rate and facilitated scientific planting on idle land, which has increased output, quality and farmers' income.

Up to now, TULIU.com has about 10,000 rural land brokers, listed transfer of 340 million mu of land, and transfer of 96 million mu of land has been completed. Moreover, TULIU.com has established 157 offline land transfer service companies around the country, covering the vast majority of China's provinces.

In January 2014, TULIU.com established a land transfer service company in Australia, making its first step in exploring an overseas market. Currently TULIU.com is establishing offline companies in countries like the United States, Russia and parts of Africa.

Amid the fast development of TULIU.com, rivals also emerge to contend for the market 'cake' valued at tens of billions yuan. Nowadays, TULIU.com has taken about 10% of market share in land transfer, and retains its leading position in the online land transfer internet with 70% market share.

According to CEO Wu Yong, "Backed by the investment, TULIU.com will set up 800 off-line land transfer service companies in 2016 and recruit 5,000 land brokers. It is notable that the government also recognizes the service mode of TULIU.com."

Four government institutions have cooperated with TULIU.com, Qitai County, Changji Prefecture in Xinjiang, Buyang in Anhui, Hanshou County in Hunan, and Lingling District, Yongzhou City in Hunan. As part of the cooperation, the government and TULIU.com used their respective advantages to share big data and jointly build service system and land finance service. The government provides information on land property rights and also establishes a monitoring and management mechanism.

"TULIU.com is the first enterprise that provides a social land transfer service for the government," continued Wu. "In 2016, TULIU.com will build 100 land transfer service centers together with the government, so as to improve land transfer efficiency and achieve win-win results."

Setting Foot in Land Finance with a Land Value Evaluation System

TULIU.com will continue to build a unique business mode and product upgrading, so as to obtain sustainable development in the changeable internet industry and according to Wu land finance -- along with the Series A backing from Shanda Capital and shared development strategy between he and Chen Tianqiao. -- is TULIU.com's breakthrough.

Currently, although the state encourages the legal transfer of land contracting and management rights, land has still not become a mortgaged asset like houses due to the lack of a land value evaluation institution, delaying the land mortgaged loans and also impeding the land transfer efficiency. Tackling this problem is essential to activating the market valued at tens of billions yuan.

In seven years, TULIU.com has established China's biggest land information data base. The company integrate information like land area, prices and development trends, form an evaluation standard and provide farmers with free land value evaluation services. In this way, land may be mortgaged as real estate for application of loans, which puts the land management rights to financial use.

During the operation, TULIU.com has noted that banks are sensitive about the risks of mortgaging land, which makes it difficult to apply for land-mortgaged loans and also contributes to the small amount of such loans. To reduce the bad debt risks facing the banks, TULIU.com has introduced insurance/guarantee companies to provide guarantees for farmers, so that the comprehensive loan cost of loans mortgaged with land management rights may be reduced to 8%, which is lower than the 12% market level. If farmers cannot return the loans timely, insurance/guarantee companies may assume the compensation, and TULIU.com will immediately start the transfer of land contracting and management rights.

Lead by Wu Yong, TULIU.com has set up such loans mortgaged with land management rights together with banks and insurance companies. The amount of loans has reached RMB60 million up to now.

"In the future, TULIU.com will explore more land finance products to expand the scale of land transfer serving a financial purpose," says Wu. "In 2016, loans mortgaged with land management rights are expected to reach RMB1 billion."

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SOURCE Tuliu.com