Writing a guest post for FT Alphaville Victor Basta, managing director of boutique investment bank Magister Advisors, says 2018 will be a year of falling valuations. The drop could hurt aspiring companies looking to go public soon, though a correction in valuations could be a long term positive for the market. Source.
UK based Funding Circle recently signaled they were looking to go public this year and now investors are wondering is this the start of a UK fintech IPO trend; rumors have swirled around Zopa, LendInvest, Monzo and others, but thus far not many have gone forward with a listing; there is concerns over the ability of the businesses to make a profit and have lessons been learned from U.S. fintech IPOs; while there has been a few small listing thus far time will tell whether or not the big fintech firms will make the leap. Source.
UK based Arrowgrass will offer investors fintech exposure through a new vehicle listed on the AIM Market; the $97mn IPO named TruFin, is the first time investors will have access to one of the country’s p2p platforms in Zopa; “Listing on AIM will allow us to provide further capital to our subsidiaries and scale faster, and take advantage of any developments in the current financial services market,” said Henry Kenner, chief executive officer of TruFin plc, to AltFi. Source.
Alibaba announced it was taking a 33 percent stake in their fintech affiliate Ant Financial; the agreement allows for Alibaba to pick of shares of Ant Financial and also ends the revenue share agreement they had in place; TechCrunch reports the deal was focused on “certain intellectual property rights owned by Alibaba exclusively related to Ant Financial.”; Alibaba saw their shares drop after the announcement and many think this is a prelude to Ant Financial’s IPO. Source.
LexinFintech Holdings operates Fenqile, a leading online lender in China, and is now rethinking their IPO plans; LexinFintech is attempting to raise $500mn through their IPO but concerns about regulators in China have made the company have second thoughts; the company is planning to come to a decision soon on whether or not to plan their roadshow ahead of the IPO. Source.
One of China’s largest online lenders has shelved their IPO because of the regulatory crackdown on online lending; the FT reports that Lufax is waiting until the China Banking Regulatory Commission (CBRC) required online lenders to apply for a license; the current thinking is the government will approve licenses in April, though the time frame could be a bit longer; Lufax wants to ensure they get it right instead of rushing to be first. Source.
Last year’s batch of Chinese IPOs did not perform well and ended up losing almost $1bn worth of shareholder money; there is an expectation that the number of Chinese IPOs will jump 30 percent in 2018; Qudian, one of the biggest from a year ago, has seen their stock plummet by more than 50 percent; expectations and the Chinese government crackdown on online lending has really hurt the prospects of some companies looking to list. Source.
The Chinese government has stepped up their monitoring on payments, halted IPO approvals, issued new rules for online lenders and continued their crackdown on cryptocurrencies; China has been seen as an innovation leader, in particular in mobile, but the recent crackdown could set the country back as a leading fintech innovator; as the nation matures in certain fintech areas its regulators need to better handle how they react to the market; Michelle Evans, global head of digital consumer research at Euromonitor International, tells TearSheet, “The next stage of its development will require Chinese regulators to find the right balance that will be provide for consumer protection and fair operations while still enabling fintech the room to innovate.” Source.
One of China’s leading online wealth management companies Lufax is looking to go public in Hong Kong at a $60bn valuation; the South China Morning Post reports the company intends to file their application by the end of January; Lufax was last valued at $18bn in 2016, they have more than 33 million users and over $75bn in assets under management. Source.
Chinese online consumer lender, LexinFintech, filed a $500mn IPO to list on the Nasdaq; LexinFintech provides installment loans for consumers to buy products; regulators have been looking closer at consumer lending in China with recent companies listing on US exchanges; the listing is being underwritten by Goldman Sachs, BofA Merrill Lynch, Deutsche Bank Securities and China Renaissance. Source.