China-based online brokerage Futu Securities has confidentially filed for an initial public offering in the US that would enable internet group Tencent to exit, Reuters reported on Tuesday.
The company intends to publicly file in the coming weeks and aims to go public in New York in early 2019, people with knowledge of the matter told Reuters. One source said it is targeting a $2.5bn valuation in the offering.
Futu runs an online platform that enables users to trade shares in companies listed in the US and Hong Kong, and it said its trading volume had exceeded $190bn as of June this year.
Dennis Wu, Futu’s CEO, told the South China Morning Post this week: “People always talk about capital controls in China. But they tend to ignore the fact that after years of development and accumulation, the wealth owned by Chinese people overseas is already huge.
“We help mainlanders trade stocks offshore, as long as they have their bank accounts and capital offshore already,”
Tencent owns more than 30% of Futu, according to SCMP. It led a series C round sized at approximately $146m in June 2017 that included Matrix Partners China and Sequoia Capital China, valuing the company at more than $1bn.
The same three investors had reportedly provided an eight-figure renminbi sum (RMB10m = $1.5m) for Futu in a 2014 series A round before returning for a $60m series B the following year.
Goldman Sachs and UBS are among the underwriters for the prospective offering, the sources stated, one adding that Futu chose the US over Hong Kong due to the quicker pace of the IPO process and the relatively disappointing performance of companies that have floated in Hong Kong in recent months.
