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Startups

China credit card repayment company cancels US IPO

Samoyed withdraws plan 'due to unfavorable market conditions'

Samoyed, which targets its services at millennial credit card holders in China, has withdrawn plans for an IPO in New York.   © Reuters

CEBU, Philippines -- Samoyed Holdings Limited (Samoyed), a financial technology service firm that focuses on China's credit card repayment market, withdrew its planned initial public offering (IPO) in the U.S., according to its latest filing with the US SEC.

"The company has determined not to pursue the sale of the securities covered by the Registration Statement at this time due to unfavorable market conditions," the company said.

The registration statement has never been declared effective by the U.S. SEC and the company has not sold any securities yet, it added.

Founded in 2015, Samoyed originally filed in September 2018 to raise $80 million in an IPO on the New York Stock Exchange. The Shenzhen-based fintech firm identified Morgan Stanley, Deutsche Bank Securities, and CICC as underwriters.

In its prospectus, Samoyed said it provides balance transfer services, offers credit cards management, credit cards discount guidelines, and balance transfer services with lower interest rates.

The company said it strategically targets credit-proven millennials in China, especially individuals born in the 1980s and 1990s who already have credit cards.

“Unlike in the U.S., credit card penetration in China is still comparatively low, making credit-proven millennials who already have established credit history with banks a cohort with prime credit quality and low delinquency rates. They are well-educated and at an early stage of their career with high potential for income growth,” the company said.

The company’s registered users reached 17 million by the end of 2017 and further increased to 24.4 million as of June 30, 2018. The repeat borrowing ratio, it added, has also improved from 55.5 per cent in 2016 to 74.5 per cent in 2017 and further improved to 80 per cent in the six months ended June 30, 2018.

Its net operating revenue increased from 53 million yuan ($7.7 million) in 2016 to 240.4 million yuan ($36.3 million) in 2017, representing a 353.5-per cent increase.

In January 2018, the company raised over 100 million yuan ($14 million) in a Series B round led by CITIC Capital, which brings the company’s total fundraising to date to 200 million yuan ($28 million).

Samoyed’s withdrawal comes as Chinese companies continue to troop to the U.S. to raise funds. Among them, is Beijing-based online consumer lender 9F, which filed to raise $150 million in an IPO in the U.S., partly to finance its expansion in Hong Kong and Southeast Asia.

The company, which was set up in Beijing in 2006 by founder and chief executive Sun Lei, who was among China’s first internet finance entrepreneurs, has more than 76.7 million users, with more than 8 million in the Greater Bay Area.

DealstreetAsia is a financial news site based in Singapore focused on corporate investment activity in Southeast Asia and India. Nikkei recently announced the acquisition of a majority stake in the company.

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