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Chinese social media and e-commerce platform Xiaohongshu delays U.S. IPO after Didi crackdown

July 17, 2021 10:30 pm

Chinese social media and e-commerce platform Xiaohongshu has delayed its planned initial public offering in the U.S after Chinese regulator strengthened scrutiny on oversea-listed Chinese companies by launching data-security probes into three technology firms, including Didi Chuxing, Boss Zhipin, Full Truck Alliance.

Detail:

Xiaohongshu, whose major backer including Alibaba Group Holding and Tencent Holdings, is seeking for alternative options including a Hong Kong IPO as the Cyberspace Administration of China (CAC) said it would review all oversea listing of Chinese technology platform companies that obtains the personal data of at least 1 million users.

Citing sources closed to the matter, Bloomberg reported that Xiaohongshu had filed confidentially for a U.S. IPO earlier this year, aiming to raise more than USD500 million.

Founded in Shanghai in 2013, Xiaohongshu had amassed more than 300 million monthly active users (MAU) as of the end of 2020, around 70% of Xiaohongshu’s MAU are younger generation users which were born in 1990s or later.

Many celebrities, fashion stars have promoted products and service to users by opening social channels on the platform.

Context:

Apart from Xiongshu, LinkDoc Technology, fitness app Keep and E-commerce platform Meicai have also put their IPO-related activities on hold over the past week or two.

Chinese regulators have intensified security probe into Chinese term firm seeking list abroad after the country’s ride hailing giant Didi Chuxing went public quietly on the New York Stock Exchange.

Chinese regulators accused Didi of disclosing sensitive data such China’s traffic and customer data to U.S. officials.

On Friday. China’s Ministry of State Security, the Cyberspace Administration of China together with five other Chinese central government departments conduct an on-site cybersecurity inspection of ride-hailing giant Didi Chuxing.