China-based property rental marketplace Danke Apartment, which counts media group Bertelsmann, co-working space provider UCommune and financial services provider Ant Financial as investors, floated on Friday having secured almost $130m.
The offering consisted of 9.6 million American depositary shares (ADSs) on the New York stock Exchange, each representing 10 ordinary shares, priced at $13.50 each. The price was below the IPO’s $14.50 to $16.50 range and the number of ADSs was cut from 10.6 million.
Danke operates what it refers to as a co-living platform, running an online platform where users can rent apartments across 13 Chinese cities that it sources from their owners and renovates to a fixed standard.
The company, which is listed under the name Phoenix Tree, made a $352m net loss in the first nine months of 2019 despite growing revenue significantly from $374m to $699m over the same period.
Venture capital firm Joy Capital led Danke’s $14.7m series A-plus round in 2017, investing with UCommune (then called URWork) and KIT Cube.
The company announced in February 2018 that it had raised $100m in series B funding from Bertelsmann subsidiary Bertelsmann Asia Investments (BAI), Joy Capital, China Media Capital (CMC), Gaorong Capital (then Banyan Capital), Vision Plus Capital and Youjin Capital, though the IPO prospectus states the round was $60m in size.
Investment firm Tiger Global led Danke’s series B-plus round (publicised at $70m, $50m according to the prospectus) in June 2018, investing alongside BAI, Gaorong Capital, Joy Capital, CMC, Vision Plus Capital and Shenzhen Doujin Investment Management.
Ant Financial co-led a $500m series C round for the company in March 2019 with Tiger Global at a $2bn valuation that included CMC, Gaorong Capital, Joy Capital and Primavera Capital.
CMC subsequently provided $100m in funding for Danke in October 2019 together with $90m from and Primavera Capital, just before the company filed for the offering.
Ant Financial bought $30m of shares in the IPO while Tiger Global purchased approximately $25m and Joy Capital $18m. An undisclosed strategic investor acquired a further $25m, the four collectively taking more than 75% of the shares in the offering.
Tiger Global maintained its 20% stake in Danke and remains its largest shareholder, followed by Joy Capital (15.6%), co-founder and CEO Jing Gao (13.5%), KIT Cube (9.9%), CMC Capital Partners (8.9%), Ant Financial, which boosted its stake from 7.8% to 8.7%, and Primavera Capital (6.5%).
Underwriters Citigroup Global Markets, Credit Suisse Securities (USA), JP Morgan Securities and Tiger Brokers (NZ) have the option to buy up to 1.44 million more ADSs which would push the size of the offering to $149m.
