Beijing-based Pintec Technology, an online platform that connects businesses and financial services firms in China, filed a prospectus on Monday with the U.S. Securities and Exchange Commission (SEC), looking to raise up to US$70M in an initial public offering on Nasdaq, effectively becoming the first financial tech company to apply for a listing in the US stock market this year.
This latest news – an IPO deal underwritten by Goldman Sachs (Asia), Deutsche Bank and Citi jointly- comes only about a month after a recent $103M fundraising led by Mandra Capital and SINA Corp. Other investors in the round include STI Financial Group, Shunwei Capital Partners, and Zhong Capital Holding Group.
Some of its other prominent backers are Xiaomi Inc, which recently concluded a public float on the Hong Kong bourse and Matrix Partners China. The firms hold stakes of 7.2% and 5.1% respectively.
Founded in 2013, Pintec Technology is the bridge between its business partners and the financial partners offering anything from point-of-sale financing solutions, personal instalment loan solutions, business instalment loan solutions to insurance solutions.
Its business partners include both offline & online businesses from telecommunications, online education, online travel to other industries. Financial partners include banks, investment funds, trust funds, consumer finance companies, insurance companies, and brokers.
The company reported close to 21 million registered users for its point-of-sale financing and business instalment loans as of March 2018.
According to its prospectus, the company’s business has grown by leaps and bounds since 2016, after it splits from its predecessor Jimu Holdings to become an independent financial tech platform. By 2017, Pintec already boasts of having 179 commercial partners, 81 financial partners including big names such as Xiaomi, Minsheng Securities, Vipshop, China Telecom, Ctrip, Orient Securities and Industrial Consumer Finance amongst others.
Pintec’s revenue increased 936% year-on-year (YOY) in 2016/2017. In Q1 2018 its revenue surged to close to half its full-year results for 2017 at about RMB 280 m while operating expenses only amounted to 34% of 2017 figures. Despite being loss-making in 2016, Pintec had swiftly reversed the trend – by first reducing its pre-tax losses by around 60 percent to RMB 66.3m in 2017 and turning the pre-tax loss into profits by Q1 2018.
The firm is mainly owned by Wei Wei, the company’s CEO (6.6 percent), Jun Dong (10 percent), Xiaomei Peng (5.2 percent) and Jing Zhou (2.3 percent). In terms of principal shareholders, Genius Hub Limited, Mandra iBase Limited, and New Fortune Fund L.P owned the largest shares at 10%, 7.9%, and 7.7% respectively.
The imminent IPO, together with the partnership with SINA Corp, will see Pintec poised to benefit from the synergies coming from leveraging SINA’s traffic & data, as well as its IPO fundraise as a financial technology (fintech) solution provider.
Its positioning as an alternative to traditional financial institutions (FIs) will also see it buoyed by the growth potential of China’s online consumer finance market, which is set to grow to RMB 3.5 trillion in size by 2022, according to an Oliver Wyman report.
Its competitor, 51 Credit Card – an online credit management platform – listed on the Hong Kong bourse last Friday, with prices surging 3.06 percent above its issue price at its opening, hitting a market value that exceeds HK$10b – hinting of positive market response for the IPOs among the financial technology sector.
