Hello Inc., a Chinese bike rental app backed by Ant Group, canceled plans for a New York IPO amid tightening regulatory scrutiny on overseas IPOs.
Why it matters: Formerly known as Hellobike, Hello Inc. is the latest Chinese tech company to backtrack on overseas IPO plans since Chinese regulators tightened review processes on overseas listings in early July.
- As a bike-sharing and transportation app, Hello’s possession of users’ traveling and mapping data, alongside its overseas funding plan, could attract attention from China’s cyberspace authority, which banned ride-hailing giant Didi from app stores shortly after it listed in New York.
Details: The Shanghai-based company is applying to withdraw an IPO plan filed in April, according to a Tuesday filing to the US Securities and Exchange Committee.
- A Hello spokesperson told TechNode that the company made the decision with “careful consideration by the company’s management.”
- “We will advance the IPO procedure in accordance with national regulatory requirements and the capital market environment in the future,” the person added.
- Hello may now seek to list in markets like Hong Kong or Shanghai Stock Exchange’s Nasdaq-style STAR Market, according to people from the company familiar with the matter. The company has been operating on losses in the past three years, according to its prospectus.
Context: Since July, a slew of Chinese tech firms, including social commerce app Xiaohongshu and fitness app Keep, have suspended overseas IPO plans.
- China’s cybersecurity authority is revising regulations to require companies that control data of more than one million users to seek regulatory permission before filing for overseas IPOs.
- Hello is one of the main players in China’s bike-sharing market, competing with Didi’s Qingju, and Meituan Bike. The company is a survivor of China’s bike rental craze that began around 2017.
- In addition to Ant Group, Hello is backed by top investors, including Fosun Group, GGV Capital, and Shenzhen Venture Capital.
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