China mobile charging business targets US listing
Energy Monster, China’s largest mobile device charging service provider by gross revenue, has filed for a US IPO.
Alibaba Group’s Taobao is the largest shareholder with a 16.5% stake. Hillhouse Capital, Shunwei Capital, SoftBank Ventures Asia and Xiaomi Group own 11.7%, 8.8%, 7.7% and 7.5%, respectively, according to the prospectus. Other backers include Advantech Capital, Sky9 Capital, and CMC Capital.
The company raised $234 million across two tranches of Series D funding in December and January. Taobao committed $124 million, with additional contributions from CMC, Hillhouse, and SoftBank.
Founded in 2017, Energy Monster rents out power banks, which are placed in 664,000 points of interest (POIs) such as entertainment venues, restaurants, shopping centers, hotels, and transportation hubs. It claims to have more than five million power banks in over 1,500 locations across China.
Charging cabinets can be identified by sight in POIs or through mini-programs accessed through the likes of WeChat and Alipay. Users scan the QR codes on the cabinets to release power banks and pay for charging services in 30-minute increments. Deposits and payments are processed through WeChat Pay and Alipay.
On completion of use, power banks can be returned to any cabinet in the network. If they are not returned within a certain period of time, Energy Monster retains the deposit. Power banks can also be purchased outright via the mini-programs.
The company had approximately 219 million registered users as of December 2020, up from 149 million a year earlier. Its market share based on gross revenue was 34.4%. China's mobile charging market is expected to grow from RMB9 billion ($1.4 billion) in 2020 to RMB106.3 billion in 2028, according to iResearch Consulting.
Energy Monster recorded revenue of RMB2.8 billion last year, up 39% on 2019, despite COVID-19. Net income fell to RMB75.4 million from RMB166.6 million, while net margins narrowed to 2.7% from 8.2%. If the financial impact of issuing convertible redeemable preference shares, the company posted a sizeable net loss of RMB2.89 billion in 2020. This compares to RMB280 million in 2019.
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