Chinese e-scooter maker Segway-Ninebot seeks to raise $297m in mainland’s first CDR listing

Segway-Ninebot, a Chinese electric scooter maker backed by Sequoia Capital China and Xiaomi, has moved closer to a planned 2.08 billion yuan ($297 million) initial public offering (IPO) on Shanghai’s Nasdaq-style STAR Market.

Registered in the Cayman Islands, Beijing-based Segway-Ninebot on Tuesday submitted an application for its IPO registration to the China Securities Regulatory Commission (CSRC), the main regulator of China’s securities industry.

According to the listing rules of the STAR Market, the regulator has 20 working days to approve or reject the IPO application. If approved, Segway-Ninebot will have up to 12 months to float shares on the sci-tech board of the Shanghai Stock Exchange (SSE).

If successful, Segway-Ninebot could become the first foreign-registered company with a variable-interest entity (VIE) structure to go public on the A-share market in Mainland China.

VIE is a legal business structure in which an investor has a controlling interest despite not having a majority of voting rights. First adopted by internet companies such as Baidu and Sina, the structure enables investors to circumvent Beijing’s restrictions on foreign direct investment in certain industries including technology, media, and telecom (TMT).

Segway-Ninebot was created in 2015 after Beijing-based Ninebot acquired American personal-transporter manufacturer Segway. As one of the world’s largest suppliers of electric scooters, the company delivers products to clients that include Xiaomi, Amazon and California-based robotics firm Nuro.

The company plans to issue about 704 million Chinese Depository Receipts (CDRs) to its custodian bank, Industrial and Commercial Bank of China (ICBC), which would then sell the CDRs at a ratio of 10 CDRs to one ordinary share, according to the company’s prospectus.

CDRs refer to shares of non-Chinese companies that trade in Mainland China the same way that American depositary receipts (ADRs) allow non-US companies’ shares to get listed on American exchanges.

According to the prospectus, Sequoia Capital China currently has a 16.8 per cent stake in Segway-Ninebot. Chinese smartphone maker Xiaomi holds a 10.91 per cent stake through an indirectly-controlled affiliate, while Shunwei Capital, led by Xiaomi founder Lei Jun and Tuck Lye Koh, owns 10.91 per cent.

Segway-Ninebot applied for the listing as early as April 2019. The application was first cleared by the listing committee of the STAR Market on June 12.

The potential Segway-Ninebot IPO could become another landmark deal for the STAR Market, which serves as a testing ground for VIE structured as well as pre-profit companies.

The market, officially opened for trading just one year ago, has witnessed the IPOs of 140 companies with a combined market capitalisation of 2.8 trillion yuan ($400 billion) as of July 22, per official statistics.

Alibaba’s Ant Group on Monday announced its plan to list on the Hong Kong bourse and the STAR Market in what could be one of the world’s most sought-after IPOs.

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.