VC-backed Chinese wearables maker seals $110m US IPO

The company sold 10 million American Depository Shares (ADS) at $11.00 apiece, which represents the mid-point of the $10.00-12.00 indicative range, according to a filing. The offering comprised entirely new shares, with no existing investors making an exit. Should underwriters fully exercise the overallotment option, an additional 1.5 million shares will be sold.

Shunwei Capital Partners – a venture capital firm set up by Lei Jun, a serial entrepreneur who also founded Xiaomi – now has a 16% stake in Huami, while Xiaomi itself and Banyan Capital hold 15.1% and 7.9%, respectively. Wang Huang, the company’s co-founder, chairman and CEO has 30.8%.

Banyan led a $35 million Series B round of funding for Huami in December 2014 at a valuation of approximately $300 million. Sequoia Capital China, Morningside Ventures, and Shunwei also participated. According to the filing, total Series A and B shares issued to these investors, and also to Xiaomi, total $40.6 million.

Huami claims to have shipped 45.3 million smart wearable devices since its inception in 2013. Shipments in the first nine months of 2017 totaled 11.6 million units, more than any other company in the world, according to a Frost & Sullivan report. It distributes fitness trackers under Xiaomi’s Mi Band brand as well as its own brand, Amazfit.

Revenue reached RMB1.56 billion ($233.6 million) in 2016, up from RMB896.5 million the previous year, with sales of Xiaomi products accounting for more than 90% of the total. Over the same period, Huami moved from a net loss of RMB37.9 million to a net profit of RMB23.9 million.

The company is part of the Xiaomi technology ecosystem, which is made up of at least 20 hardware start-ups in which the smart phone maker has invested. Their products are sold through Xiaomi’s online mall and across several hundred offline stores rolled out in the last year.

This ecosystem has been integral to the company’s revival. Xiaomi raised equity funding in late 2014 at a valuation of $45 billion, but two years later the company’s rapid growth had caught up with it: handset sales were down, supply chains were challenged, and ambitious plans for international expansion weren’t delivering. Now Xiaomi is being touted for an IPO at a valuation of $100 billion.

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• Topics
• Greater China
• Technology
• Industrials
• IPO
• China
• Venture
• Exit
• TMT
• Shunwei Capital Partners
• Banyan Capital
• Xiaomi