Beike, a Chinese online housing platform backed by Tencent and Softbank, is reportedly gearing up for a US listing that could raise $1 billion to $2 billion.
Why it matters: Beike’s application for a listing on a US exchange bucks a trend among Chinese technology firms, which are turning to domestic listings due to deepening tensions between the two countries and aftershocks from Luckin’s fraud admission.
- With a potential share offering upwards of $1 billion, Beike could be one of the largest tech IPOs this year.
- China’s housing market is rife with companies using high-risk models.
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Details: The Beijing-based company is in discussions with cornerstone investors including Morgan Stanley for a US listing as early as the third quarter, reported All Weather TMT (in Chinese).
- The company expects its revenue to double this year, and was reportedly profitable in 2019.
- Beike’s $14 billion valuation and slim profits may discourage investors, according to the All Weather TMT report citing a private equity investor familiar with the transaction.
- Beike has already filed a confidential listing application with the US Securities and Exchange Commission to go public on Nasdaq. Goldman Sachs and Morgan Stanley are leading the offer coordination, Nikkei Asia Review reported.
- The company declined to comment on Monday, but told local media on Friday that it does not have an IPO timetable for now.
Context: Beike, an online listing platform that helps users find properties, is an offshoot of Chinese real estate brokerage Lianjia, or Home Link. More than 370,000 real estate agents across 110 cities use the platform, which operated more than 40,000 offline outlets as of April this year.
- Beike received its $2.4 billion Series D Plus in March from a consortium led by Softbank’s Vision Fund. In July 2019, the firm secured $1.2 billion in a Series D led by Tencent at a $10 billion valuation.
- Beike rival Fangdd raised $78 million via a downsized US IPO in November.