Housing Rental Marketplace Phoenix Files for IPO in New York

The living space rental platform, powered by technology, was founded by an ex-Google China engineer.

Belinda Zhou
    Oct 30, 2019 6:00 AM  PT
Housing Rental Marketplace Phoenix Files for IPO in New York
author: Belinda Zhou   

(Corrected to say the $100 million figure in the prospectus is estimated solely for computing the amount of the registration fee.)

Phoenix Tree Holdings Ltd. has filed its preliminary prospectus seeking an initial public offering in New York.

The Beijing-based company, founded in 2015, aims to provide affordable long-term lodging to youth in China's 13 cities. The company lists living spaces for rent through Danke.com since 2015 with two branded products, Danke Apartment and Dream Apartment. The spaces, which can be a private room or an entire home, are owned by individual property owners. Phoenix Tree acts as a property manager, providing renovation and standard furnishing, according to the filing.

"Our mission is to help people live better," Phoenix Tree stated.

The company has expanded rapidly, operating 406,746 apartment units by 2019. 

"We can effectively manage an extensive network of renovation contractors to simultaneously renovate 50,000 apartment units scattered in thousands of neighborhoods across 13 cities and maintain consistent quality," it said in its filing.

In the nine months through September, Phoenix Tree's revenue reached $700 million, triple from the same period last year, according to the filling. Net loss was $352 million, up 209% from $118.1 million a year ago. For 2018, the company reported revenue of $374.3 million and losses of $191.6 million.

In its filing, Phonex Tree said it is primarily driven by technology.  "We run Danke like a data science company," it said, "as our founders are technology veterans, technology is deeply rooted in our DNA." 

The founder of Phoenix Tree, Boyang Shen, previously served as the head of business development at Google China. 

The real estate platform said it intends to use the proceeds of its U.S. offering to scale its business, including sourcing and renovating additional apartment units. The company also said it expects to invest in further technology development. 

In its preliminary prospectus, Phoenix Tree said it may raise up to $100 million, though the figure is a placeholder for the purpose of computing the amount of the registration fee. The pricing and the number of shares to be offered have yet to be determined.

Underwriters on the deal are Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC.

Phoenix Tree expects to become publicly traded on the New York Stock Exchange under the ticker symbol "DNK."