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Chinese car maintenance startup Tuhu said to be mulling US IPO

24 Feb 2021 / 01:47 H.

HONG KONG: Chinese car maintenance service startup Tuhu is considering a US initial public offering (IPO) this year, after raising up to US$400 million (RM1.617 billion) from a funding round earlier this month, people with direct knowledge of the matter told Reuters.

Investment banks have been pitching to the company in recent weeks for the potential IPO, said five people. The company will likely opt for a US stock listing as there is more liquidity and more comparable companies trading on US exchanges, said three of the people.

Two separate sources, however, cautioned the company, which provides services via its website, mobile app, call centre and third-party platforms, has not yet made a final decision on the IPO plan.

The plan, if finalised, will add to a growing list of Chinese companies, mainly from the technology sector, launching IPOs in the United States in the past year lured by higher valuations and strong liquidity in the world's largest economy.

Thirty Chinese companies listed in the United States in 2020 in deals worth US$11.7 billion, a six-year high, according to Refinitiv data.

There have been US$2.3 billion worth of listings so far in 2021.

Founded 10 years ago in Shanghai, Tuhu provides car repair and maintenance services via an online-to-offline business model. Its app links customers with over 2,400 car repair centres and 13,000 partner centres in 405 cities in China, according to Tuhu's website.

Tuhu raised US$300 million to US$400 million from its latest fundraising at a valuation of US$3.8 billion, which was led by existing investors Tencent Holdings and Sequoia Capital China, said two of the people.

All the sources declined to be named as the information is confidential.

A Tuhu spokesman said the company's fundraising is still ongoing and that there is still uncertainty around the plans. He added that the company has ample capital and has no clear listing plans. Tencent and Sequoia declined to comment.

Tuhu raised US$450 million in a funding round in 2018, which was led by Tencent, Carlyle Group and Sequoia, according to a company statement at the time. It also counts Goldman Sachs and Baidu Inc as early investors.

Private equity firm FountainVest Partners is among investors in the latest fundraising, said one of the people. The firm declined to comment. – Reuters

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