UP Fintech Holding's IPO: What You Need To Know

U.S. investors will gain greater exposure to the Chinese fintech space this week through a $104.7 million offering by UP Fintech Holding Ltd (TIGR).

Here are the details.

The Offering

UP Fintech Holding on Wednesday will issue 13 million American depository shares at $8, above the previously expected range of $5 and $7, on the Nasdaq. Management will maintain a dual-class share structure with Class A and Class B shares. The latter are wholly owned by CEO and founder Tianhua Wu, who will retain about 80.5 percent of voting power.

Strategic investors include Xiaomi Corporation and Interactive Brokers, and underwriters to the offering include Citigroup Inc C and Deutsche Bank AG DB Securities.

As an “emerging growth company” under U.S. law, the firm is eligible for reduced reporting requirements.

See Also: The Levi Strauss IPO: What You Need To Know

The Company

UP Fintech, which was incorporated in the Cayman Islands but is headquartered in Beijing, is a Chinese online brokerage firm offering U.S. equities, Hong Kong equities, options, warrants and futures. After launching its trading platform in 2015, it became the largest facilitator of U.S. securities trades for Chinese investors with 58.4-percent market share.

Management closed 2018 with 502,000 customer accounts, 1.58 million registered users and $119 billion in total trading volume. From 2016 to the end of 2018, it notched 27.1-times quarterly trading volume growth, 12.7-times client asset balance growth and 152-percent compound annual growth in customer accounts.

The Finances

The firm saw 148-percent compound annual revenue growth between 2016 ($5.5 million) and 2018 ($33.6 million), although it has not been profitable since its 2015 inception.

It reported net losses of $10.8 million, $7.9 million and $44.3 million in 2016, 2017 and 2018, respectively, with each year yielding negative cash flows from operating activities of $11.5 million, $8.5 million and $21.2 million.