According to a Bloomberg report, Hello Inc, a Chinese bike-rental firm, has filed for an initial public offering in the US.
Why is it garnering attention?
Hello, a Shanghai-based firm, has survived China’s competitive bike rental bubble and is a survivor of China’s bike rental bubble, and is among the largest bike-rental firms in the country. If it successfully lists, it would be the first US-listed Chinese bike-rental company.
Hello has included the disclosures and accountability that come with a public listing. It signals a shift to sustainable growth. This has brought a backlash against bike-rental apps for reckless expansion in earlier years.
Following multiple rounds of consolidation, China’s bike-rental market is now dominated by firms that are backed by deep-pocketed giants like Ant Group-backed Hello, Didi’s Qingju, and Meituan Bike, formerly Mobike.
Electric bike-rental and ride-hailing businesses are also operated by the company, all part of the “sharing economy”. This however is facing scrutiny as part of a broader regulatory tightening over China’s Big Tech.
According to the sources cited by Bloomberg, the company chose to file confidentially with the US Securities and Exchange Commission. This option is becoming popular owing to the flexibility it allows for timing and pricing. According to the report, Hello is working with Morgan Stanley, China International Capital Corp., and Credit Suisse Group for the listing.
However, the size of the targeted raise was not disclosed. Although a previous IFR report said that the firm looks to raise as much as $1 billion.
The spokespersons are declining to comment on the matter.
Launched in 2016, quickly gained traction as the first bike-rental app within two years of Mobike and Ofo, to focus its business in China’s small cities. Hello, also known as Hellobike, Hello TransTech, and Hello Global, merged with Shanghai-listed competitor Youon Bike in October 2017.
In 2019, the company had 300 million registered users. That was the time when it said it was China’s largest two-wheel transportation app. As of October, Hello had 400 million registered users for its bike rental business which operates in more than 460 cities, renting electric bikes in 400 cities, and offering car-hailing services in over 300 cities.
In addition to Ant Group, the company is backed by top investors including Fosun Group, GGV Capital, and Shenzhen Venture Capital.