Shared Bike Operator Hello Suspends New York IPO

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Alibaba-backed [BABA:US] shared bike company Hello is reported to have shelved its plan to go public on NYSE, two months after it submitted the prospectus to the SEC on April 23 to raise USD100m, as reported by Caixin Global on June 24. According to a source with direct knowledge of the situation, the transaction has been postponed but the company has not withdrawn the IPO application. Similarly, on June 23, Tencent-backed [0700:HK] online dating app Soul also put the US IPO pricing progress on hold, amid the unfair competition lawsuits against the company.

According to Caixin, the suspension of the Hello and Soul deals was probably more related to the specific companies, instead of indicative of a sudden market cooling towards fast-growing but loss-making Chinese tech startups. Chinese tech firms, such as Aihuishou International [RERE:US] and Full Truck Alliance [YMM:US], have successfully debuted on NYSE in recent days. According to the prospectus of Hello, the company’s net loss narrowed to RMB1.1bn in 2020 from that of RMB2.2bn in 2018 and RMB1.5bn in 2019, and the company’s revenue also expanded 25.3% YoY to RMB6bn in 2020. However, the company still faces intense competition with domestic peers, including Meituan-backed [3690:HK] Mobike and Didi Chuxing-backed [DIDI:US] DIDI Bike. According to Sina, the above three brands occupied over 95% of China’s bike-sharing market as of September 2019.

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