DCM, Sequoia to reduce holdings in China’s Vipshop
DCM and Sequoia Capital will trim their holdings in Vipshop as the US-listed Chinese e-commerce site raises around $181 million through a share issue.
The company will sell 4,000 new American Depository Shares (ADS) and existing investors will sell a further 2,000 ADS at a proposed price of $13.13 apiece. Funds managed by DCM will see their stake in Vipshop fall from 18.8% to 16.4%, while Sequoia goes from 19.8% to 17.3%.
Three Vipshop directors are also making partial exits, but Eric Shen, the company's co-founder, chairman and CEO, is not among them. His holding will be diluted as a result of the new share issue.
Vipshop listed on the New York Stock Exchange in March 2012, is the first Chinese company to complete a US IPO in seven months. The company raised $72.7 million after pricing its shares well below the indicative range. DCM and Sequoia agreed to buy an additional $20 million of shares in the offering.
Ahead of the IPO, DCM and Sequoia owned 20.1% and 21.4% of Vipshop, respectively. They committed $20 million to the company's Series A round in late 2010 and followed up with $50 million in the Series B round in May 2011.
Founded in 2008, Vipshop specializes in flash sales - offering branded goods online at sharp discounts, but only for a limited period of time. It had 26.8 million registered members and had sold products for more than 5,800 domestic and international brands as of year-end 2012.
The company wasn't profitable when it listed, having incurred net losses of $8.4 million and $107.3 million in 2010 and 2011. Revenues jumped more than threefold in 2012 to $692.1 million, narrowing the net loss to $9.5 million. Vipshop recorded a profit of $6.3 million for the fourth quarter of the year, one of the first Chinese e-commerce companies to enter the black.
According to Frost & Sullivan, the number of online shoppers in China grew from 80 million in 2008 to 187 million in 2011, and it is expected to reach 363 million by 2015. Online retail sales revenue is projected to grow from RMB785 billion ($126.2 billion) in 2011 to RMB2 trillion in 2015, with the online share of overall retail sales increasing from 4.3% to 9.8%.
More on Exits
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.