China HR SaaS player Beisen completes $30m HK IPO

The company sold approximately 8m shares at HKD 29.70 apiece, according to a prospectus. Its stock opened at HKD 29.60 on April 13 and then dropped as low as HKD 19.02 in afternoon trading before recovering to close at HKD 26.10. Beisen has a market capitalisation of HKD 18.7bn (USD 2.4bn).

The most recent funding round – a USD 260m Series F in May 2021 – valued the company at USD 1.86bn. The round was led by Vision Fund, Goldman, Primavera Capital, and Fidelity International, and it featured re-ups from Matrix, Sequoia, Genesis Capital, and Shenzhen Capital Group.

Beisen was founded in 2002 and received funding from Shenzhen Capital and Tianjin Venture Capital in 2010, according to AVCJ Research. The prospectus lists eight funding rounds, from a CNY 5m (USD 637,000) angel round in 2010 through the Series F. More than USD 378m has been raised in total.

Matrix is the largest external shareholder with 19.93%, followed by Sequoia on 19.30%, Genesis on 7.90%, and Vision Fund on 5.74%. Other external investors are all sub-5%.

Beisen claims to be China’s largest provider of cloud-based human capital management (HCM) solutions by revenue in 2021. Its market share of 11.6% exceeded that of the second and third-largest players combined. The company’s platform, known as iTalentX, helps corporate clients recruit, evaluate, manage, develop, and retain talent efficiently.

The iTalentX platform is supported by a cloud-based platform-as-a-service (PaaS) infrastructure that eliminates the need to build core modules from scratch for each product enhancement or new customer or use case. Clients use low-code or no-code development tools to drag and drop pre-configured modules based on their specific needs.

There is also a shared software development platform that allows developers to build and scale modules quickly without the need to purchase additional storage and networking capacity in anticipation of traffic spikes.

Beisen’s 4,900 clients include most of the top 10 players across technology, real estate, financial services, automotive, and manufacturing. Most of its revenue comes from subscription fees. It achieved a 113% subscription revenue retention rate for the 12 months ended September 2022.

Revenue reached CNY 679.6m for the 12 months ended March 2022, up from CNY 556.3m a year earlier. The contribution from subscriptions to cloud-based HCM solutions rose from CNY 349.1m to CNY 463.5m. Beisen’s other revenue source is implementation and value-added services.

Over the same period, gross profit jumped from CNY 369.6m to CNY 400.5m; the gross profit margin for cloud-based solutions is 74.8% compared to 24% for other services. However, the company’s net loss widened from CNY 940.1m to CNY 1.91bn.

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• Topics
• Greater China
• Technology
• IPO
• China
• enterprise software
• Matrix Partners
• Sequoia Capital
• Softbank
• Goldman Sachs
• Primavera