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Qihoo-backed 360 Finance Lowers Planned Public Offering to $57.4 Million

The company, backed by Qihoo, expects to lift off on the NYSE on Dec. 14.

Anna Vodopyanova
    Dec 06, 2018 4:12 PM  PT
Qihoo-backed 360 Finance Lowers Planned Public Offering to $57.4 Million

360 Finance Inc. downsized its proposed initial public offering to up to $57.4 million in a regulatory filing today and said it expected to price its American depositary shares at between $16.50 and $18.50 apiece as it prepares to float its stock next week.

The Shanghai-based consumer finance platform, backed by Qihoo 360 Technology Co. Ltd., seeks to sell 3.1 million ADSs on the New York Stock Exchange under the symbol "QFIN." Whether the company has reduced the number of its shares, or their expected price, from the $200 million it targeted in October, was not disclosed. The company's IPO is expected on Dec. 14.

360 Finance operates an automated decision-making platform that evaluates applications for loans typically used for consumer spending. Within five minutes, approved borrowers can get funds that have been provided by the company's financial partners. The 360 platform features tools that include borrower evaluation, matching, and identity authentication, as well as workflow automation and risk management.

Qihoo, also known as the 360 Group, is one of China's largest internet companies and is the controlling shareholder of 360 Finance. The company said its products were integrated within its partner's network, which drives the growth of its user base with marketing and gives it stability in the eyes of the funding partners. In addition, the two collaborate on research and development.

Support from Qihoo has allowed 360 Finance to rival the country's main players in the industry by market share. In its filing, 360 Finance placed itself among China's largest financial platforms including Ant Financial, the finance arm of giant Alibaba Group Holding Ltd. (NYSE: BABA), Tencent Holdings Ltd.'s (HKEX: 0700) commercial bank WeBank, JD Finance, which is the financial unit of JD.com Inc. (Nasdaq: JD),  and Baidu Finance, an affiliate of search engine Baidu Inc. (Nasdaq: BIDU). 

Through the third quarter of this year, the company had 6.4 million borrowers with $14.3 billion in cumulative loan originations and an outstanding balance of $5.2 billion, 360 Finance reported in its filing. Last year, the company had revenue of $46.7 million and a net loss of $25.1 million. During the first six months of 2018, its revenue soared to $112.3 million and its loss increased to $86.4 million, according to the filing.

Its primary purpose for seeking an offering was "to create a public market for our shares for the benefit of all shareholders, retain talented employees by providing them with equity incentives, and obtain additional capital," 360 Finance said. The company added that it expected to use the proceeds of its stock sale for brand promotion, research and development, cultivating talents, and general corporate purposes.

In its filing today, 360 Finance has added Lighthouse Capital International Inc., Haitong International Securities Company Ltd., AMTD Global Markets Ltd., China Securities (International) Corporate Finance Company Ltd., Tianfeng International Securities Ltd., HeungKong Securities Ltd., and Khorgos Zhengdao North Beta Consulting Co. Ltd. to Citigroup Global Markets Inc. as the underwriters of its IPO in New York. It has removed Goldman Sachs (Asia) LLC from the list.

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