VC-Funded China-Based Companies With Recent US IPOs Down Over 90%

Even before this past week, shares of China-based companies that went public on U.S. exchanges in recent years were performing terribly overall. But China’s President Xi Jinping’s latest moves to consolidate power haven’t helped things.

A Crunchbase analysis of 17 venture-funded companies from China that went public on Nasdaq and the New York Stock Exchange in the past two years showed an average decline of 91% from IPO price to now. In the process, they’ve wiped out over $145 billion in collective market capitalization.

For perspective, we charted initial and current valuations, as well as aggregate decline, for the 17 companies below:

Biggest decliners

For some, the declines are much steeper than the average. Shares of Beijing-based Missfresh, a fast grocery delivery service backed by Tiger Global, for instance, are a staggering 99% since going public on Nasdaq in June 2021.

To help stem the slide into delisting territory, Missfresh recently implemented the equivalent of a 1 for 30 reverse stock split. Since then, shares have slipped further. On Tuesday, they fell 32% to hit a market cap of just $13 million — well below the $2.5 billion capitalization cinched at IPO time.

Ucommune, a coworking space provider that’s been called the WeWork of China, has also seen its market cap obliterated in recent months. The company, which debuted with a $769 million market cap nearly two years ago, is now valued at just $14 million.

Smart Share Global, a mobile device charging service that operates under the brand Energy Monster, has also struggled since going public on Nasdaq in April 2021, with shares having sunk 95% since their debut.

Didi is way down too

It would also seem remiss to discuss venture-backed Chinese company IPOs without mentioning Didi, the ride-hailing giant that debuted in June 2021 in an oversubscribed NYSE offering.

The 10-year-old company carried out the largest debut in years for a Chinese brand on a U.S. exchange, landing an initial market capitalization of over $70 billion.

Things went downhill pretty fast. The company found itself in the crosshairs of China-based regulators almost immediately after its offering. In May of this year, Didi disclosed it is facing a probe by U.S. securities regulators. Shares, meanwhile, are down more than 90% since the IPO.

Large losses for prominent investors

Share price declines for U.S.-listed Chinese companies are dealing a blow to returns of many of the region’s most prominent startup investors.

For example, Tencent and Apple are key investors in Didi. SoftBank was a lead backer in produce e-commerce upstart Dingdong. Tiger Global’s list of market laggards, meanwhile, includes online learning platform 17zuoye and beauty brand Yatsen, as well as Missfresh.

On the heels of losses, investors have been pulling back. In the third quarter of 2022, venture funding in Asia sank to its lowest level in 10 quarters, per Crunchbase data.

China’s startups saw only $9.6 billion invested last quarter, compared to $18.5 billion in the same quarter of 2021. The number also is down from the $9.8 billion invested in Q2 and a dramatic drop from the record $27.9 billion investors poured into China startups in Q4 2021.

Illustration: Li-Anne Dias

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