China's PE-backed Secoo seeks $115m in US IPO

The company plans to sell 8.5 million American Depository Shares (ADS) at $11.50-13.50 apiece, according to a filing. Underwriters also have the option to sell a further 1.28 million shares under the overallotment offering, which could take the overall size of the IPO to $131.9 million. None of the company’s private equity investors will sell any shares in the IPO.

IDG Capital is the largest external shareholder with a 24.5% stake in the company. CMC Capital has 11.7% while Ping An Ventures and Ventech Capital have 9.2% and 7.2%, respectively. However, the dual-class share structure to be implemented alongside the offering means that Richard Li, Secoo’s co-founder and CEO, will hold most of the voting power.

The company’s most recently announced funding round came in July 2014, when CMC led a commitment of more than $100 million. The Series D round also featured existing investors IDG, Ventech, Crehol Capital and Vangoo Capital Partners.

IDG was Secoo’s first investor, contributing $10 million in 2012. This was followed by a $30 million round in 2012 featuring Bertelsmann China Holding, Crehol, Ventech and IDG, and then a Series C round of undisclosed size in 2013, which was led by Japan-based Vangoo.

Secoo claims to be Asia’s largest online integrated upscale products and services platform by gross merchandise volume (GMV). Its GMV reached RMB3.47 billion in 2016, a year-on-year increase of 34.9%, while the average spending per order – for the online business only –  exceeded RMB3,500 in the first six months of 2017.

The company had 15.1 million registered members as of June and approximately 300,000 active customers by year-end 2016. It offers more than 300,000 product lines, covering 3,000 global and domestic brands. There are direct supply arrangements with the likes of Tod’s, Salvatore Ferragamo and Versace.

In addition to its online presence, Secoo has opened five offline “experience centers” in mainland China, Hong Kong and Malaysia. Approximately $60 million of the IPO proceeds have been earmarked for expanding this offline network as well as for marketing, branding and promotional activities. The company also plans to invest in its logistics and IT infrastructure.

Revenue came to RMB2.59 billion in 2016, up from RMB1.74 billion the previous year, while the company’s net loss narrowed from RMB222 million to RMB44.6 million. A net profit of RMB52.3 million was recorded for the first six months of 2017.

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• Topics
• Greater China
• IPO
• Consumer
• Technology
• China
• China Media Capital
• IDG Capital Partners
• TMT