DOMESTIC online lender Dianrong.com is raising US$150 million from investors, including Standard Chartered Plc., in a round that values the startup at about US$1 billion, according to sources familiar with the matter.

    The fundraising will close in a few weeks and strong interest from potential investors boosted the startup’s valuation from an earlier estimate of US$800 million, the sources said.

    The new investments come as China’s online lending market explodes, challenging both traditional State-owned banks and the multitrillion-dollar shadow banking sector.

    Peer-to-peer lenders in China gave out at least US$32.5 billion in loans last year, almost quadruple the rest of the world combined, according to U.K. investment bank Liberum Capital Ltd.

    In peer-to-peer lending, companies use the Internet to match borrowers and lenders at better rates than banks. Lending in China will almost double this year to US$60 billion, compared with US$11.7 billion in the United States, according to Liberum Capital.

    China’s biggest such lender, Lufax, completed a round of funding in April that valued the company at US$10 billion, The Wall Street Journal said. The company, formally known as Shanghai Lujiazui International Financial Asset Exchange Co., is 49 percent owned by Ping An Insurance (Group) Co.

    Dianrong has facilitated about 1 billion yuan (US$161 million) in loans, mostly to businesses. It raised US$12 million during three funding rounds, with investors including Hong Kong developer Sun Hung Kai Properties Ltd., according to Crunchbase.

    In total, 24 peer-to-peer firms have received 3 billion yuan in financing from companies — including SoftBank Corp., Sequoia Capital and Xiaomi Corp. — as of September, according to Zero2IPO Group, an industry tracker. (SD-Agencies)