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.”
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.
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 authorized 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.