China’s PE-backed Tubatu files for HK IPO
Tubatu, a Chinese online home renovation platform backed by Matrix Partners and Sequoia Capital, has filed for an IPO in Hong Kong.
Financial details of the listing were not disclosed in Tubatu’s prospectus. The company plans to use about 30% of the proceeds from the IPO to upgrade its user-facing site and technology backend, with another 30% intended for marketing campaigns to grow its user base. The remainder will support the expansion of Tubatu’s sales force and for strategic investments in the home renovation industry.
Tubatu was founded in 2008 as Shejiben, a platform for contacting interior designers, and has since expanded to include a wide range of home renovation services. The company aims to intelligently match users with the service providers that best fit their needs, while also helping to build trust through the mandatory use of escrow services to ensure that payment is released upon satisfactory completion of work.
According to iResearch, Tubatu has been the largest online home renovation platform in China by gross merchandise volume (GMV) since 2015. As of June 2018 the company had about 26 million users, along with 84,500 renovation contractors, 1.1 million interior designers, and 1,290 suppliers of construction materials and furnishings.
Tubatu generates revenue through commissions from service providers, platform management fees, advertising fees, and payments for training services. The company reported RMB881 million ($129 million) in revenue for the year ended December 2017, up from RMB571 million the year before. Over the same period its net loss grew from RMB563 million to RMB1.1 billion.
Matrix first invested in Tubatu in 2011, committing $2 million in Series A funding. Sequoia joined Matrix for the company’s $16 million Series B round in 2014, and both investors were joined by US-listed classified site 58.com for the $37 million Series C round the following year. Currently Matrix holds a 22% stake in Tubatu, while Sequoia owns 16% and 58 holds 11%. The remaining stake is owned by founder Wang Guobin.
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