PE-backed BabyTree to list in Hong Kong

The company raised approximately $40 million in venture capital funding from offshore investors between 2007 and 2014 but repurchased all the shares last year with a view to securing onshore financing. Matrix Partners, Susquehanna Asia Investment, and China Broadband Capital Partners were among the early investors.

BabyTree’s prospectus describes a series of loans and equity investments involving domestic limited partnerships and the executive team over the course of 2015 and 2016. In July 2015, Jumei International, a Chinese online beauty products retailer listed in the US, announced it would lead a $300 million round for BabyTree. It contributed $250 million, but the commitment was comprised entirely of debt, including a $120 million convertible loan and a $130 million revolving credit facility.

Separately, Chinese after-school tutoring provider TAL Education invested RMB150 million ($22.6 million) in the company in early 2015 and Fosun led a RMB3 billion round in late 2016.

In May 2018, the company completed a share subscription worth RMB2.72 billion. TAL, Jumei and Fosun all participated, as did a fund controlled by CITIC Securities, family office Wu Capital, and Noah Holdings. This was a subscription to offshore shares by existing investors in BabyTree’s onshore entities.

The transaction was followed by a new funding round, which saw Alibaba – acting through Taobao China – invest $127.6 million for a 9.9% stake in the company. Jumei sold a 4% interest on Taobao for $86.5 million, leaving it with a 3.33% holding. Fosun owns a 26.39% stake in BabyTree, while TAL has 10.82%, Wu has 0.99%, CITIC Securities has 3.9%, and Noah has 0.38%.

BabyTree was launched in 2007 as a platform through which expecting and new parents could share pregnancy and parenting advice. It now claims to be the largest business of its kind in China with an average of 139 million monthly active users in 2017. In addition to the flagship babytree.com platform, the company has WeTime, which focuses on child development, and e-commerce portal Meituan Mama. Most of its revenue comes from data-driven advertising and e-commerce.

BabyTree generated RMB729.6 million in revenue last year, up from RMB509.7 million in 2016. Over the same period, its net loss narrowed from RMB934.5 million to RMB911.1 million. However, the company claims it would have been profitable in both years, if changes in the fair value of financial liabilities and equity-settled share-based payment expenses were excluded.

The size and pricing of the IPO have yet to be decided.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• IPO
• Technology
• China
• TMT
• Fosun Group
• Noah Holdings
• Alibaba Group