Chinese cybersecurity major Qi An Xin Group has raised 1.5 billion yuan ($210.46 million) in a pre-IPO round of financing to reach a valuation of 23 billion yuan ($3.22 billion), as the company is eyeing to go public on the newly-launched Sci-Tech Innovation Board in Shanghai.
Boston-born investment firm IDG Capital, Beijing-based private equity firm Xicheng Jinrui, an investment platform of Oriza Holdings, China’s 10 Fund, Hong Kong-listed furniture stores firm Red Star Macalline, and other investors poured money into the investment, said 10 Fund in a statement on Thursday.
Qi An Xin Group, founded in 2014 as a holding subsidiary of Chinese internet security firm Qihoo 360, widely known in China for its namesake antivirus software. The company was spun out from Qihoo 360 in 2016 to operate as a stand-alone corporate security business.
In April 2019, Qihoo 360 announced to transfer its entire shares in the company, accounting for about 22.58% of the total equity, to two firms affiliated with Chinese state-owned telecom equipment provider China Electronics Corporation for 3.731 billion yuan ($522.89 million).
The deal, which marked the formal separation of the two once closely attached firms, was claimed by Qihoo 360 founder and chairman Zhou Hongwei as a move to help Qi An Xin go public.
The three-year-old Qi An Xin signed an agreement with CSC Financial in June 2019 for pre-listing services to help the company float shares on the Sci-Tech innovation board.
The Sci-Tech innovation board, also known as STAR Market, is a Nasdaq-style tech board that made its debut in Shanghai in June 2019 as the Chinese government’s boldest move yet toward a less-regulated market for pre-profit technology companies to list in the country.
The listing plan comes as China will continue to lead the growth of the global cybersecurity market in the coming five years, with the market size expected to reach $17.9 billion in 2023, according to a report from International Data Corporation (IDC).
The CAGR of cybersecurity spending in the country from 2019 to 2023 will be 25.1%, compared with the global average of 9.44%. Government, communication and financial sectors will see the most cybersecurity spending, accounting for roughly 60% of the sum, the report indicates.
Qi An Xin claimed to have served over 90% central government divisions, state-owned enterprises and large-scale banks in China. It currently has over 6,500 employees and provides cybersecurity services in China, Indonesia, Singapore and Canada.