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Lalamove considers shifting planned US$1 billion IPO to Hong Kong amid heightened scrutiny by Beijing
- Deliberations comes against backdrop of Beijing implementing new rules on overseas listings by tech firms
- Crosstown rival GoGoX raised US$100 million in latest funding round
Hong Kong logistics start-up Lalamove is considering moving its planned US$1 billion initial public offering to Hong Kong as a crackdown on technology firms and a series of new rules on overseas listings by Beijing has cast a pall on US listings by mainland and Hong Kong companies, Bloomberg reported, citing people familiar with the matter.
Lalamove, which filed confidentially in June to go public in the US, could still decide to pursue a listing on an American bourse, the people said.
The potential move by Lalamove, which is known as Houlala in China, comes as crosstown rival GoGoX, formerly known as GoGoVan, completed a US$100 million fundraising ahead of its own potential listing in the city.
“We are paying close attention to capital markets but we have no specific timeline and plan for going public,” a Lalamove spokeswoman said on Wednesday.
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The deliberations over whether to relocate Lalamove’s offering came against the backdrop of Beijing announcing draft rules on Saturday to review all foreign IPOs by technology platform companies in China that possess the personal data of at least 1 million users.
The heightened scrutiny by Beijing has spooked investors in the US and prompted firms to delay or reconsider US listings in light of the uncertain regulatory environment. It could hinder dozens more who have filed or were preparing to file for listings on American bourses.
The rules follow a series of data-security inquiries and other crackdowns on the sector following Chinese ride-hailing giant Didi Chuxing’s US$4.4 billion IPO in New York in June, the biggest offering by a Chinese company in the US since 2014.
One regulatory source said Didi “forced its way” to go public before the Cyberspace Administration of China completed a data security assessment, prompting a deeper review by the country’s top cybersecurity regulator.
Lalamove was founded in 2013 by Chow Shing-yuk, a Stanford graduate and former professional poker player. It operates in more than 20 markets in Asia, Latin America and the US, and had a pool of more than 700,000 driver partners.
Chow previously told the South China Morning Post in a 2019 interview that he preferred a potential listing on the Hong Kong stock exchange.
The company raised US$515 million in a Series E funding round last year, led by Sequoia Capital China and Hillhouse Capital. Bloomberg reported at the time that the company was seeking a valuation of US$8 billion following the fundraising.
Separately, GoGoX completed its latest funding round on Tuesday, raising US$100 million from a group of investors led by Bocom International and Cyberport Macro Fund. Other investors included 58.com, China InnoVision and Alibaba Group Holding, the owner of the Post.
“During the Covid-19 pandemic, we have capitalised on the booming development of e-commerce and achieved phenomenal growth,” Steven Lam, GoGoX co-founder and CEO, said in a statement. “This new funding will entrench our intracity logistics footprint, assist our efforts to innovate our products and services, equip ourselves to thrive under the new normal, and build a better and stronger GoGoX.”
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