Credit Suisse Halts Work on Chinese Gay Dating App IPO
(Bloomberg) -- Credit Suisse Group AG has stopped working on the upcoming U.S. initial public offering of Chinese gay dating app Blued, according to people familiar with the matter.
Credit Suisse joins other investment firms, including Citigroup Inc. and Bank of America Corp., that in recent months have dropped off the U.S. debuts of high-profile Chinese companies. The Swiss bank has halted work on a number of U.S. listings by Chinese companies, as concerns grow about a potential sector downturn and level of investor demand. Since the summer, Credit Suisse’s name has vanished from the listing documents of podcast app Lizhi Inc., bitcoin mining machine maker Canaan Inc. and drone company EHang Holdings Ltd., the filings show.
It wasn't clear why Credit Suisse dropped off Blued’s IPO, but it did so before the company filed publicly, as opposed to Lizhi, Canaan and EHang. Blued founder Geng Le didn’t immediately respond to an email query during non-business hours. A spokeswoman for Credit Suisse declined to comment.
Founded in 2012 by former policeman Geng, Blued has become an icon for the Chinese LGBTQ community and attracted more than $130 million in venture capital as of March last year. Besides providing dating services to 40 million users, the app also offers live streaming and connects men who want to become parents with overseas surrogates. The services are part of Blued’s larger strategy to diversify its business and generate revenue.
Blued has said it’s eyeing an IPO ideally in the U.S., which offers a simpler process and deeper capital markets. The trick for Geng will be convincing investors he can expand his operations in a country where gay people have few legal protections and every new service pushes the frontiers of government tolerance and social acceptance.
Citigroup and Bank of America stopped working last year on the listing of Ucommune Group Holdings Ltd., the largest rival to WeWork in China.
U.S. listings by Chinese companies in 2019 were plagued by poor performance and pared-down fundraising targets, which in turn has dented investor demand already weakened by U.S.-Chinese trade tensions. Shrunken deal sizes mean the fee pool also gets smaller, making deals less attractive to banks.
The 33 Chinese companies that listed in the U.S. last year have dropped by an average 13% from their IPO price, and only 9 of them have risen since their floats, according to data compiled by Bloomberg.
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