China-based online brokerage Futu Holdings went public on Friday in a $90m initial public offering that involved internet group and existing backer Tencent buying $8m of shares through subsidiary Tencent Mobility.
The company priced 7.5 million American depositary shares at $12 each, at the top of the IPO’s $10 to $12 range, valuing the company at approximately $1.33bn. Its shares opened at $16.41 on its first day of trading on Friday and closed at $15.32.
Futu runs a digital brokerage with 5.6 million registered users, more than 500,000 of which have opened accounts on the platform. It was responsible for more than $115bn in trades in 2018, a year it which it generated almost $104m in revenue, making a $17.7m net loss.
The company last raised funding in a $146m series C round led by a $91.4m investment from Tencent, also Futu’s cloud and channel partner, in June 2017. It was backed by Matrix Partners China and Sequoia Capital China and reportedly valued it at more than $1bn.
The series C followed a $60m series B round in 2015 featuring the same investors, including $27.3m from Tencent, all three of which participated in a $5m series A the previous year.
Tencent’s 38.2% stake was diluted to 34.2% in the offering, while Futu founder, chairman and CEO Leaf Hua Li will remain its largest shareholder, with a 45.4% share post-offering. Matrix Partners China has a 5.4% stake post-IPO, General Atlantic 5.3% and Sequoia 3.5%.
Goldman Sachs (Asia), UBS Securities, Credit Suisse Securities (USA), HSBC Securities (USA) and BOCI Asia are the underwriters for the offering. They have the 30-day option to buy another 1.12 million shares to boost the size of the offering to $103.5m.
