Sequoia-backed Futu Securities files for US IPO

The size and pricing of the offering have yet to be established. Last month, Reuters reported the company was seeking up to $500 million and targeting a valuation of $2.5 billion.

According to a prospectus, Futu raised $215 million across three funding rounds between 2014 to 2017 from Tencent Holdings, Matrix and Sequoia, with the three currently holding 38.2%, 6.1% and 4% stakes, respectively. Hua Li, a former Tencent employee who founded Futu in 2012, is the largest shareholder with 51.7%

Futu mainly generates revenue from its mobile-accessible investment services platform. The company’s target customers are affluent Chinese who have offshore bank accounts and trade securities including stocks, warrants, options and exchange-traded funds in capital markets such as Hong Kong and the US.

For the six months ended June 2018, Futu brokered HK$478.2 billion ($61.1 billion) in trades, ranking it fourth among Hong Kong online retail brokers, according to Oliver Wyman. The company also provides social network services that allow users to exchange market views, watch live broadcasts of corporate events and participate in investment education courses.

As of September 2018, Futu claimed to have a user base of 5.3 million, including 457,000 registered clients. Daily active users reached 169,000 in September. Revenues came to HK$311.7 million in 2017, representing a 258.2% increase from 2016. Net losses narrowed from HK$98.5 million in 2016 to HK$8.1 million in 2017.

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• Topics
• Greater China
• Financials
• Exits
• China
• Matrix Partners
• Sequoia Capital
• Tencent
• TMT
• IPO