PE-backed Gogox sinks on debut after $98m Hong Kong IPO

The company, which received several rounds of private funding, before and after the merger, sold approximately 35.9m shares – including an overallotment option of 4.68m shares – at HKD 21.50 apiece, according to a filing. Two cornerstone investors, Chinese automaker Chery Commercial Vehicle and GF Securities-owned GF Global Capital, accounted for two-thirds of the offering, post-overallotment.

The stock opened at HKD 21.60 on June 24 and peaked at HKD 23.15 in early trading before falling back to close on HKD 16.72. This left Gogox with a market capitalisation of HKD 10.3bn.

GoGoVan was founded in 2013 by Steven Lam (pictured) after a previous start-up idea faltered due to difficulties arranging transportation. Seeing an opportunity in the logistics dysfunction, Lam and his team hit on the idea of an app that could connect van drivers directly to business customers without relying on a call centre.

The merger with 58.com’s 58 Suyun in 2017 valued GoGoVan at more than USD 1bn. It was followed by a rebranding from 58 Suyun to Kuaigou Dache in mainland China in 2018, and from GoGoVan to Gogox in other countries and regions in Asia in 2020.

58.com is the largest shareholder in the company with 47.95%, prior to the overallotment option, according to the IPO prospectus. GoGoVan and Alibaba Group own 16.69% and 12.26%, respectively.

Other investors include Cainiao, Alibaba’s logistics affiliate, the Alibaba Hong Kong Entrepreneurs Fund, InnoVision Capital, Qianhai FoF, Russia-China Investment Fund, UBS, Trout & Partners, Greater Bay Area Homeland Investments, Agricultural Bank of China, and Orion Investment Group.

The international arm of China Bank of Communications and Cyberport Macro Fund joined the investor roster in July 2021 when they led a USD 100m round.

Gogox operates in more than 340 cities across mainland China, Hong Kong, Singapore, Korea and India. It is the third-largest online intra-city logistics platform in mainland China and the market leader in Hong Kong with a market share of 50.9%. Last year, 28.4m orders were fulfilled, generating total gross transaction volume of CNY 2.67bn (USD 399m).

The company offers three kinds of service: on-demand intra-city logistics by matching drivers with shippers; planned and on-demand services where fees are negotiated directly with the customer; and value-added services such as fuel vouchers and vehicle maintenance and repair. Planned and on-demand services account for more than half of gross transaction value (GTV).

Its asset-light business model relies on a network of approximately 27.6m registered shippers and 5.2m registered drivers. Artificial intelligence-driven algorithms and advanced matching and routing technologies are used to create logistics solutions that can respond quickly to customer needs while optimising service fees, shipping fares paid by shippers, and driver earnings.

As of December 2021, Gogox had 27.6m registered shippers and 5.2m registered drivers. However, shipment orders have not tracked a consistent upward curve, largely due to fierce competition. Orders reached 33.4m in 2019 with GTV hitting CNY 3.3bn. The corresponding numbers for 2020 are 27.1m and CNY 2.69bn, and then 28.4m and CNY 2.67bn in 2021.

Revenue came to CNY 660.9m in 2021, up from CNY 530.4m the previous year. Overseas business accounted for 48% of revenue. Gross profit margin rose from 34.6% to 36.6%, while net losses grew from CNY 658.2m to CNY 872.9m.

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• Topics
• Greater China
• IPO
• Technology
• Support services
• Hong Kong (China)
• Logistics
• IPO
• Alibaba Group
• Qianhai FoF
• BoCom