PE-backed Chinese cosmetic surgery platform surges on US debut

The company sold 13 million American Depository Shares (ADS) for $13.80 apiece, the top end of the indicative range, according to a filing. The shares opened on May 2 at $17.26 and closed at $18.41.

Founded in 2013, the company has been dubbed the Facebook of plastic surgery in China. Its business comprises three segments: an information portal that provides specialist coverage of medical aesthetics; a social network through which users can share their experiences; and a surgical consultation and booking service. Procedures are listed much like products on an e-commerce site, with prices for surgery on different body parts and details of the doctor who would perform it.

So-Young claims to be China’s plastic surgery market leader, with its mobile app accounting for 84.1% of total daily user time spent on online medical aesthetic service apps in 2018, according to Frost & Sullivan. It also facilitated treatment transactions worth RMB2.1 billion ($312 million) in 2018, one-third of total online bookings for the industry last year. Meanwhile, there were over 240 million average monthly views in the fourth quarter of 2018. The company works with 5,600 clinics and other service providers.

Most of So-Young’s revenue comes from information listing fees and reservation service fees charged to medical aesthetic service providers. It generated RMB617.2 million in 2018, up from RMB259.3 million the previous year. Over the same period, net income rose from RMB17.2 million to RMB55.1 million. So-Young was loss-making as recently as 2016.

The company has several PE and VC backers, including Orchid Asia, Matrix Partners China, and the Russia-China Investment Fund (RCIF), among others. Overall, it went through five rounds of funding between 2014 to 2018, raising more than $151 million from BOC International Holdings, CDH China Management and Apax Partners, in addition to the three firms.

Matrix first backed the company in 2014 and re-upped later the same year, committing $20 million in conjunction with Trustbridge Partners. They are now the two largest external stakeholders with 15.5% and 12.5% of stake after the offering, respectively. Apax Partners owns 7.7%, having led a $60 million Series D round in early 2018.

Last September, Orchid led a Series E worth $70 million, with additional commitments from Matrix, BOC International, and RCIF. The latter is backed by the Russian Direct Investment Fund and China Investment Corporation (CIC), each of which committed $2 billion in seed funding in 2012. Orchid holds a 6.6% interest in the company.

Tencent Holdings is said to have invested $50 million in 2016, but it does not appear on the register of largest shareholders.

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• Topics
• Greater China
• Technology
• IPO
• Consumer
• IPO
• TMT
• China
• Consumer
• Matrix Partners
• Apax Partners
• Orchid Asia Group Management
• Trustbridge
• Tencent