Up Fintech, the China-based digital brokerage also known as Tiger Brokers, floated in the US yesterday in a $104m initial public offering, enabling consumer electronics producer Xiaomi to exit.
The offering consisted of 13 million American depositary shares (ADSs), each representing 15 ordinary shares, priced at $8.00 each, above the $5 to $7 range Tiger Brokers set earlier this month.
IB Global Investments, a vehicle for brokerage firm International Brokers, has agreed to buy an additional $7m of shares through a private placement and $6.1m of shares in the IPO. The company’s shares opened at $8.10 on their first day of trading yesterday before closing at $10.92.
Tiger Brokers operates an online brokerage that targets Chinese customers worldwide. It has 1.58 million registered users and was responsible for some $119bn of trades in 2018, facilitating trades across various geographies, markets, products and currencies.
The company increased revenue from $16.9m to approximately $33.6m in 2018, though its net loss also grew, from $7.9m to $44.3m.
About 40% of the IPO proceeds will be allocated to general corporate purposes, with the rest to go to strategic investments or acquisitions, the securing of new international licences and the achievement of minimum capital requirements for operating in countries such as New Zealand.
Tiger Brokers raised more than $59m in funding between 2014 and early 2017, including $15.7m in a 2015 series A round led by Xiaomi that followed undisclosed amounts from ZhenFund and China Renaissance K2 Ventures.
ZhenFund, China Renaissance K2 Ventures, Citic GoldStone Fund Management and Huagai Capital invested $29m through a series B round in 2016, before Tiger Brokers added $14m in a China Growth Capital-led series B-plus round in early 2017.
Interactive Brokers Group provided an undisclosed amount of funding for the company in September 2017, before Prospect Avenue Capital, Orient Hontai Capital and Oceanpine Capital co-led its $80m series C round in July 2018, valuing it at $1.06bn.
Tiger Brokers CEO Tianhua Wu is its largest shareholder, owning a 17% stake that was diluted from 18.9% in the offering. Xiaomi holds a 12.6% stake post-IPO, followed by Tigerex, a vehicle for investor Binsen Tang (11.1%), IB Global (7.6%) and an entity called Jager Fintech Holding (6.3%).
Underwriters Citigroup Global Markets, Deutsche Bank Securities, AMTD Global Markets, China Merchants Securities (HK) and Top Capital Partners have a 30-day option to acquire a further 1.95 million ADSs, which would push the IPO up to almost $120m.
