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Fangdd, Chinese Online Real Estate Platform, Eyes $150 Million IPO

Belinda Zhou 2019-10-10 04:00 AM

Fangdd Network Group Ltd., China’s largest online real estate marketplace in terms of registered agents, has filed for an initial public offering in New York, seeking to sell up to $150 million worth of its American depositary shares.

The Shenzhen company provides SaaS-based solutions to real estate agents in China for managing customers, property listings, capital and transaction data, it said in its preliminary prospectus filed Tuesday with the U.S. Securities and Exchange Commission.

“Our mission is to make it easy for real estate agents to do business and empower them to achieve their dreams,” Fangdd wrote in the filing. 

The company cited market research by Frost & Sullivan, saying it supplied services to more than 45% of all real estate agents in China, counting 2 million, as of December 2018. Fangdd added that by June 2019, it had 1.07 million registered agents on its platform, with 300,000 active agents.

In addition, Fangdd operates the largest online database of properties, according to research by Frost & Sullivan it cited in its filing. As of June, it had 131 million properties, the company reported.

"As agents improve the way they conduct business and manage their day-to-day operation through the use of our products and solutions, they become increasingly dependent on our tools and services to source and execute real estate transactions," the company wrote. "This enables us to better develop an agent-centric, open, and SaaS-empowered marketplace and build an ecosystem within which real estate agents complete transactions."

The real estate platform operator reported revenue of $233.7 million for the six months through June, soaring 55% year-over-year. The company turned profitable during the first half-year of 2019, seeing its net income hit 97.2 million yuan ($14.2 million) in contrast to net loss of 4.5 million yuan ($600,000) in the corresponding period of 2018.

In July, internet regulators in Beijing condemned Fangdd's mobile application among 17 other platforms for collecting and using their users' personal information without permission, according to the Ministry of Industry and Information Technology in China.

Fangdd said it intends to use the proceeds of its IPO in New York to enhance its research and development, boost its sales and marketing and invest in working capital, as well as general corporate purposes.

Morgan Stanley & Co. LLC, Citigroup Global Markets Inc. and UBS Securities LLC will act as the underwriters on the expected IPO, together with China International Capital Corp. Hong Kong Securities Ltd. and AMTD Global Markets Ltd.

The platform, founded in 2011, expects to become publicly traded on the Nasdaq Global Market under the ticker symbol “DUO.”