Chinese lifestyle platform Xiaohongshu, known as ‘Little Red Book’, puts its US IPO on hold amid Beijing’s crackdown
- Xiaohongshu among dozens of Chinese firms re-evaluating their IPO plans as China puts overseas listings under greater scrutiny
- Social media and e-commerce platform topped 100 million monthly active users in 2019
Xiaohongshu filed confidentially to list in the US earlier this year and was hoping to raise more than US$500 million.
Bloomberg reported the delay in Xiaohongshu’s IPO plans earlier on Friday.
01:26
China kicks off antitrust probes into Alibaba over alleged monopolistic practices
A Xiaohongshu representative did not immediately respond to a request for comment on Friday.
Backed by Tencent and Alibaba Group Holding, Xiaohongshu was founded in Shanghai in 2013 and has expanded to include social media and e-commerce. As of October 2019, the company had more than 100 million monthly active users, with 70 per cent of them born in the 1990s or later, according to its website. Alibaba is the parent company of the South China Morning Post.
The regulatory crackdown goes back to the last-minute shelving of Ant Group’s dual listings in Hong Kong and Shanghai in November and has spooked investors on both sides of the Pacific.
Concerns about regulatory risk in China have wiped off about US$1 trillion in market value from US-listed Chinese tech stocks since mid-February, according to Goldman Sachs.
But it has not stopped all firms from proceeding with potential listings.