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BusinessBanking & Finance

Xiaomi-backed Tiger Brokers taps investor frenzy for Chinese tech IPOs in US

  • Online brokerage jointly underwrote 12 US IPOs from Chinese companies last year
  • We want to be the IPO investment bank for Chinese technology entrepreneurs, director says

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The New York Stock Exchange. Chinese issuers are raising bigger deals in the US despite trade tensions between Beijing and Washington. Photo: TNS
Georgina Lee

As mainland Chinese companies launch bigger initial public offerings (IPOs) on exchanges in the United States, Beijing-based online brokerage Tiger Brokers is helping investors back home get a cut of these global offerings as a joint bookrunner.

Tiger Brokers, a six-year-old start-up backed by Chinese smartphone maker Xiaomi, is betting on the use of technology to redefine how IPO investment banking services are delivered to clients. By using mobile internet technology to connect companies with investors, it also hopes to compete for IPO mandates from Chinese issuers.

The brokerage is tapping Chinese investors’ perennial hunger for IPOs as it develops its own niche by diversifying its business beyond just stock trading. China’s new economy sector contributed 16.1 per cent of its gross domestic product in 2018, and its contribution is rising. These companies often turn to offshore markets such as the US and Hong Kong to meet their funding needs.
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In July, it was a joint bookrunner for electric vehicle start-up Li Auto alongside Goldman Sachs, CICC, Morgan Stanley and UBS. Li Auto, which raised US$1.09 billion, is the third-largest US IPO by a Chinese company year to date. Tiger Brokers is also a joint bookrunner along with Credit Suisse and Citi on the US IPO of children’s e-learning app iHuman, which has filed this month to list on the New York Stock Exchange (NYSE). Last year, it jointly underwrote 12 US IPOs from Chinese companies.

“As a technology start-up ourselves, we understand the pain points faced by entrepreneurs in fundraising as we have gone through the same life cycle,” said Fang Lei, a director at Tiger Brokers, which was listed on Nasdaq in March 2019. “We want to be the IPO investment bank for Chinese tech entrepreneurs.”

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Fang Lei, a director at Tiger Brokers. Photo: Handout
Fang Lei, a director at Tiger Brokers. Photo: Handout
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