(Yicai Global) Feb. 13 -- Chinese internet firm Beijing Kunlun Tech plans to invest USD15 million to take a 10 percent stake in leading Indian online finance platform Finnov as it looks to sell off its stock in Chinese microlender Qudian.

Kunlun Tech, a subsidiary of listed Beijing Kunlun Tech, will make the investment and earn a chair on board of Finnov, which runs cash loan provider Krazybee, the buyer's parent said in a statement yesterday. Shunwei Ventures III Hong Kong, Quark Venture, Capria Seed Series and other institutional investors also took part in the fundraising.

Finnov has a wealth of experience in internet finance and India's online loan sector is undergoing rapid growth, the firm said, adding that it has been observing the market for the past two years.

The move comes as Kunlun Tech continues to dump its shares in Krazybee's Chinese counterpart Qudian, which went public in the United States in October 2017. It once held 19.7 percent and was the firm's second-largest shareholder, but has been selling off ever since the listing and announced last year that it will shed its remaining holdings when an appropriate opportunity arises.

Qudian was one of a handful of Chinese fintech firms, including Hexindai, Ppdai Group and Jianpu Technology, which listed in the US in late 2017 but struggled to find success early doors. Qudian Chief Executive Luo Min stirred up even more trouble for his firm when he said shortly after the listing that his company would write off overdue payments as bad debt, rather than chase them up.

It began life in 2014 offering loans to college students, but was forced to move into less lucrative fields after the Chinese government outlawed lending to learners in June 2017. One of the main reasons was students committing suicide after finding themselves under excessive pressure from debt collectors, with some being forced to take nude photos as collateral. Even after it listed on Oct. 18 that year, reports still suggested Qudian lent to college-goers.

Kunlun started in the gaming sector but now has investments in a range of sectors. It entered internet finance in 2015 and asides from Qudian, has shares in Yinker and British peer-to-peer lending company LendInvest, among others.

Editor: James Boynton