Qiming-backed China’s ABC Technology eyes STAR Market IPO

Shanghai, China. Source: Ralf Leineweber/Unsplash

ABC Technology, a Chinese developer of AI-based fintech solutions for clients in the banking and finance sectors, has hired an investment bank to help launch its initial public offering (IPO) on Shanghai’s Nasdaq-style STAR Market.

The company had initially targeted an offshore listing in Hong Kong or another overseas board, but it decided on the STAR Market for its offering that could happen as early as the fourth quarter in 2021, according to a source familiar with the matter, who requested anonymity because the information is private.

ABC Technology did not immediately respond to DealStreetAsia’s request for comments.

ABC Technology changed its route earlier this year to pursue an IPO back home due to “the heated domestic IPO market” in recent months, said the source.

The level of “low-interest rates” and “money printing” by central banks worldwide to help save the economy from the COVID-19 crisis means that the IPO frenzy could persist for a longer duration.

Founded in July 2017, ABC Technology leverages artificial intelligence (AI), big data, and cloud computing to develop full-stack solutions for professionals in the banking and finance industries to acquire, process, and analyze financial data.

The firm serves corporate clients including Hong Kong Exchanges and Clearing Limited, the operator of Hong Kong’s stock exchange and futures market, Chinese investment bank China International Capital Corporation (CICC), and securities firm Haitong Securities, among others.

The firm had raised $30 million in a Series B round from Hong Kong-based venture capital firm MindWorks Capital, SIG China, and China-based Qiming Venture Partners in December 2018.

It had also completed a $30-million Series A round in August 2017 and an angel round worth millions of US dollars in 2016.

With growing interest in startups using technologies to improve the operation of financial institutions, Chinese unlisted fintech companies raised a combined $4.5 billion from venture capital, private equity and M&A in 2019, according to KPMG.

New structure

Beijing-based ABC Technology, which was previously a variable interest entity (VIE), already dismantled the structure to prepare for the local IPO, said the source.

The VIE structure refers to a business structure in which an investor has a controlling interest despite not having a majority of voting rights.

The structure was created about two decades ago to bypass Chinese rules restricting foreign investment in sensitive industries like media and telecommunications. It enabled Chinese Internet firms such as Sina Corp, NetEase, and Sohu.com to be listed in the US.

Chinese authorities had not officially endorsed this structure, although Ninebot – the Chinese owner of the Segway scooter brand – floated shares on the STAR Market in late October in what was the first company with a VIE structure to sell Chinese Depository Receipts (CDRs) in China.

CDRs are the equivalent of US-listed American Depository Receipts (ADRs).

ABC Technology currently has over 300 employees across mainland China, Hong Kong, and Singapore, according to its website. The firm picked Singapore to host its international headquarters in November 2019.

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.