China's Hello Inc. Wheels Toward New York IPO

The bike-sharing provider has yet to turn profitable, though its losses have narrowed.
CapitalWatch StaffApr 26,2021,22:15

Hello Inc., a bike-sharing provider in China, is trying its luck at an initial public offering in New York.

The Shanghai-based company filed with the U.S. Securities and Exchange Commission on Friday for the public trading of its American depositary shares. While the exact terms are yet unknown and the prospectus states $100 million as a target placeholder, the company reportedly hopes to raise up to $1 billion.

Underwriters on the offering, expected to take place on the Nasdaq Stock Market, are Credit Suisse, Morgan Stanley, and CICC.

Hello boasts of being China’s top two-wheel mobility services provider. Moreover, citing iResearch, Hello said it was the third largest local services platform in China as of December 2020 in terms of transaction volume.

In addition to bikes, which make up the majority of Hello’s revenues, Hello also operates a carpooling marketplace, provides e-scooters and local services, such as hotel reservations and mobile grocery stores, in pilot mode, according to the prospectus. The company also partners with a batter swapping provider.

In 2020, Hello booked $926.4 million in revenues, a 25% growth from 2019. The pace of growth significantly lowered amid the Covid-19 outbreak: In 2019, it posted 130% increase in revenues from the preceding year. The company has yet to turn profitable. In 2020, it narrowed its net loss to $173.7 million.

Among its principal investors, Hello Inc. counts Antfin (Hong Kong) Holding Ltd., an affiliate of Alibaba’s Ant Group. Antfin owns 36.3% equity in the bike-sharing platform prior to the IPO. Ant’s mobile wallet app Alipay provides payment and escrow services to Hello Inc. and Peng Yang, VP of Ant, is a director in the company.

The company was co-founded by Lei Yang and Kaizhu Li, now CEO and president, respectively. Yang comes from a valet parking platform, Shanghai Jingyao, while Li previously served at a subsidiary of Group Ltd. (Nasdaq: TCOM), Asia’ largest booking services provider.

Another team member, Tao Jiang, served at proptech company Shenzhen Fangduoduo Network Technology (Nasdaq: DUO) and local services giant Meituan Dianping (HKEX: 3690). Now, Meituan is Hello’s top rival, as well as Didi Chuxing.

Topics:Hello, China, Mobike, Didi, IPO