In the competitive race of China's fintech sector, 360 Finance has emerged as a remarkable dark horse. Launched publicly in 2016 and spun off as an independent entity in September 2018, this financial technology company rapidly capitalized on China's consumer credit boom before diversifying into installment e-commerce and small business lending. Its first earnings report as a publicly traded company reveals not just explosive growth, but the technological engine powering its ascent.
Breakout Performance: Stellar Financial Metrics
The numbers speak for themselves. In Q4 2018, 360 Finance recorded net revenue of 1.57 billion yuan ($226 million), a 261% year-over-year increase. Non-GAAP net profit reached 670 million yuan ($96 million), surging 352% from 149 million yuan in Q4 2017.
For the full year, the company generated 4.45 billion yuan ($640 million) in net revenue—a 464% annual increase—with non-GAAP net profit multiplying nearly tenfold to 1.8 billion yuan ($259 million). These figures underscore 360 Finance's ability to achieve hypergrowth within just three years of operation.
Tech-Driven Differentiation: The Core Advantage
Unlike traditional financial institutions, 360 Finance established itself as a pureplay fintech firm from inception. Leveraging its parent company 360 Group's cybersecurity and big data expertise, the company developed distinct advantages in data analytics, artificial intelligence, and risk management—capabilities that directly translated into business performance.
Key operational metrics confirm this trajectory: The platform facilitated 95.98 billion yuan ($13.8 billion) in loan volume during 2018, up 210% year-over-year, while outstanding loan balances reached 43.08 billion yuan ($6.2 billion)—a 254% increase from 12.17 billion yuan at the end of 2017.
User growth has been equally impressive. By December 31, 2018, 360 Finance had extended credit to 12.54 million approved users (up 280%) and served 8.28 million borrowers (up 262%). The market has responded favorably, with shares gaining over 30% and analysts from Citi and China Securities (International) issuing "buy" ratings.
Building Moat: Technology-Enabled Capital & User Acquisition
360 Finance's rapid scaling in both loan volume and user base stems from technological advantages that create dual moats in capital sourcing and customer acquisition.
As China's fintech sector matures, the prevailing trend emphasizes platform models that connect financial institutions with end-users rather than direct lending. 360 Finance's positioning as "a technology platform connecting borrowers with financial partners" aligns perfectly with this evolution.
The fundamental economics of internet consumer finance rely on platforms obtaining capital at competitive rates, then lending to consumers at higher rates. Thus, the ability to source cheaper funding and deploy it efficiently to quality borrowers becomes critical.
China's recent financial sector reforms have tightened institutional liquidity and raised funding costs, while strengthened fintech regulations and P2P platform failures have made capital partners more cautious about risk management capabilities.
Risk Management Edge: Lowering Costs, Elevating Quality
Financial institutions evaluating platform partnerships prioritize risk control as much as cost considerations. Here, 360 Finance's inherited cybersecurity DNA from 360 Group provides natural advantages.
The company employs sophisticated tools including complex network analysis, unsupervised machine learning, and automated modeling to assess borrower risk throughout the credit lifecycle. Despite rapid growth, its 90+ day delinquency rate (M3+) remains at just 0.92%, while average outstanding balance per user stays stable around 5,000 yuan—demonstrating effective credit screening.
Risk management investments are substantial: As of September 2018, 48% of employees (332 personnel) worked in risk control and R&D. This technical rigor enables 360 Finance to secure larger credit lines from partners at lower costs—78% of funding now comes from institutional sources, exceeding competitors' ratios.
User Growth Through Tech-Enhanced Experience
While many fintech platforms report slowing user acquisition, 360 Finance continues doubling its approved users and borrowers annually. CEO Xu Jun views marketing expenditure as strategic investment rather than pure cost—a philosophy that allowed continued customer acquisition even during 2018's challenging environment.
From the user perspective, 360 Finance's tech-driven approach delivers streamlined experiences: 97% of transactions undergo fully automated approval processes. Customer loyalty metrics validate this approach—the repeat borrowing rate reached 57.9% in 2018, up from prior years.
Diversification: Exploring New Frontiers
Beyond core consumer lending, 360 Finance is expanding into new verticals. September 2018 saw the launch of two strategic products: "360 Fenqi" (installment e-commerce) and "360 Xiaoweidai" (small business loans).
The installment platform complements existing credit products by embedding financing into consumption scenarios. Meanwhile, the small business loan product addresses China's massive underserved SME market—where only 12% of tens of millions of small businesses obtain bank loans, creating a 20 trillion yuan funding gap.
By integrating enterprise tax, invoice, payment, and operational data through big data analytics, 360 Finance aims to solve the risk assessment challenges that traditionally constrain SME lending. CEO Xu estimates this market at 30-40 trillion yuan—triple the size of consumer finance.
With 2019 revenue guidance of 8-8.5 billion yuan (nearly doubling 2018 results), 360 Finance appears positioned to maintain its momentum through technological differentiation and strategic diversification.