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Ping An's OneConnect to launch $500 million U.S. IPO in rare down round: sources

Ping An's OneConnect to launch $500 million U.S. IPO in rare down round: sources

HONG KONG, Dec 2 (Reuters) – Ping An Insurance’s OneConnect Financial Technology plans to launch a U.S. initial public offering (IPO) for about $500 million on Tuesday, people with knowledge of the matter said, reducing both its target offering size and valuation in a rare “down round”.

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The unit of China’s biggest insurer by market value, Ping An Insurance Group Co of China Ltd, is looking for a valuation of between $4.5 billion and $5.5 billion in its long-awaited public offering, said the people.

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However, that is well below the company’s $7.5 billion valuation last year when it raised $750 million in its maiden funding round, potentially making for a rare down round — a fall in valuation following a new investment — of a tech-related firm

Ping An didn’t immediately respond to a request for comment. The people declined to be identified as they were not authorised to speak to media

OneConnect, which provides technology solutions to small and medium-sized financial institutions, was eyeing a valuation of about $8 billion and an IPO of up to $1 billion, sources told Reuters in June

It changed the listing venue to New York from Hong Kong a few months ago in the hope of achieving a higher valuation, Reuters reported, with massive anti-government protests in Hong Kong making markets jittery

According to its IPO prospectus, OneConnect had revenues of 1.55 billion yuan ($218 million) in the first nine months of 2019, up 72% from the same period a year earlier, but losses widened to 1 billion yuan from 579 million yuan

Goldman Sachs, JPMorgan and Morgan Stanley are among the main banks working on the IPO

The shares will start trading on December 13, said the people. (Reporting by Julie Zhu; Additional reporting by Clare Jim; Editing by Kirsten Donovan)