China’s 58 Home Said to Delay U.S. IPO as Virus Hurts Demand
China’s 58 Home Is Said to Delay U.S. IPO as Virus Hurts Demand
(Bloomberg) -- 58 Home, the maid and home-maintenance service owned by China’s Craigslist equivalent 58.com Inc., has delayed its planned U.S. initial public offering, according to people familiar with the matter, as the coronavirus outbreak cripples customer demand.
The company’s pre-IPO financing round -- a private fundraising effort that started late last year -- also hasn’t been completed, said the people, who asked not to be named because the information is private. The IPO had been expected to take place in the first half of the year.
Shares of 58.com Inc. fell 4.9% in New York trading, the biggest decline since September.
The 58 Home’s move adds to the list of IPO setbacks amid the virus outbreak. Restaurant operator Daikiya Group Holdings Ltd. on Wednesday canceled its first-time share sale in Hong Kong, while Chinese biotech firm InnoCare Pharma Ltd. has postponed investor meetings for its planned listing in the financial hub.
The virus has killed at least 1,355 people in China as of Thursday. People across the nation have been minimizing personal contact for fear of contracting the disease, hurting 58 Home’s on-demand services including part-time cleaners and home handymen.
“Obviously, the virus outbreak has affected home and cleaning services -- that entire sector has almost been brought to a standstill,” 58 Home said in a statement. “Our short-term revenue will be affected.”
The firm declined to comment on its IPO and fundraising plans.
The company added it is facing a severe shortage of maids, and 30 million people in the home and cleaning-services sectors could lose their jobs if the outbreak continues.
Workers Stranded
Many workers are still stranded in their hometowns, where they traveled for Lunar New Year celebrations, and haven’t been able to return to major cities after the authorities curtailed travel to try to contain the virus.
To ensure the health of maids who work on its platform, 58 Home has been logging their travel history, and offering masks and temperature checks.
Locally known as 58 Daojia, the company has been seeking funds to bankroll an expansion into China’s competitive online services arena. It was aiming for a valuation of as much as $2 billion in a U.S. IPO.
58 Home is one of China’s leaders in helping people connect online with services from flower delivery to home cleaning. Backed by Tencent Holdings Ltd., it’s vying against deeper-pocketed rivals such as Meituan Dianping and businesses operated by e-commerce leader Alibaba Group Holding Ltd. All are targeting a slice of a market for physical, on-demand services that are being disrupted by online technology.
58.com’s unit raised its last private funding round in 2015, garnering $300 million from investors including Alibaba, KKR & Co. and Ping An Group. Parent 58.com holds 68.8% of the company’s equity interest but doesn’t consolidate the unit’s financials in its own results, according to its annual filing.
To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net;Dong Cao in Beijing at dcao59@bloomberg.net
To contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, Peter Vercoe, Fion Li
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