Debuts of, Qunar may signal renewed interest in China IPOs

In consecutive days, two venture-backed China-based tech companies have debuted on U.S. exchanges, bringing to four the number of Chinese companies that have completed public offerings in the states this year.

Although it’s a signal that investors are once again looking favorably at U.S.-listed Chinese companies, no one is saying yet that there’s a resurgence taking place.

On Oct. 31,, which raised about $71 million in venture funding from DCM, Warburg Pincus and SAIF Partners, raised $187 million in its IPO. The company, which operates a customer-to-customer sales platform known as the Craigslist of China, priced its shares at $17 per American depositary share (ADS), above its initial expected price range of $13 to $15.

On Nov. 1, Qunar Cayman Islands Ltd, which raised about $85 million from GGV Capital, Tenaya Capital and Mayfield Fund and is majority-owned by Chinese search engine Baidu, launched its IPO. The Beijing-based company, which operates a travel search engine, raised $167 million on shares priced at $15 per ADS.

“It’s definitely an encouraging sign that the environment is getting better when quality companies are getting listed,” said Hurst Lin, general partner of DCM. and Qunar are the third and fourth VC-backed Chinese companies to list on a U.S. exchange in 2013, according to data from Thomson Reuters (publisher of VCJ). Montage Technology, which raised more than $12 million in funding from Intel Capital and Translink Capital Partners, went public in September, while LightInTheBox Holding Co, backed with more than $46 million in funding from GSR Ventures, Ceyuan Ventures and Trust Bridge Partners, launched its IPO in June.

Lin and other investors are taking notice of the new listings, because the number of Chinese companies listing in the U.S. has plunged from a high of 40 in 2010, according to Thomson Reuters, when hiSoft Technology International Ltd,, SinoTech Energy, and, among others, went public.

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Source: Photo courtesy of DCM

Hurst Lin

“It’s definitely an encouraging sign that the environment is getting better when quality companies are getting listed.”

Hurst Lin

General Partner


Public investor interest in Chinese companies waned in the wake of accounting scandals in China, said Lin. In addition, the euro debt crisis turned investors off emerging markets.

But he said the higher quality of the companies going out is changing the tide, as public market investors are once again showing an appetite for Chinese companies. Better performance in the aftermarket is also helping.

IPO investors want growth. And the two IPOs from China in 2012—Vipshop and YY—are two of the best-performing stocks on U.S. exchanges over the past year.  YY, which operates an online gaming network and raised funding from GGV Capital and others, went public at $10.50 per share in November 2012, and was recently trading at nearly $48. Vipshop, which operates an online retailing site and is backed by DCM and Sequoia Capital, went public at $6.50 in March 2012, and was recently trading above $67.

Lin said he has heard from institutional bankers, who tell him that one or two more Chinese companies plan to file for IPOs in the U.S. market before the end of the year.

And of course, everyone is eagerly anticipating the U.S. debut of the Chinese Internet e-tail giant Alibaba, whose highly-anticipated IPO in 2014 will rival that of Facebook and Twitter. The Nasdaq and the NYSE are vying to be the U.S. listing home of Alibaba, which is expected to file for an estimated $15 billion IPO in 2014, valuing the operator of retail, auction and content websites at more than $100 billion.