Fangdd Ready to Lift Off as "DUO" on Nasdaq, Raises $78 Million

The tech-driven mobile platform offers smart tools and solutions for real estate agents in China. It reported 1.07 million registered agents and 131 million property listings as of June 2019.

CapitalWatch Staff
    Nov 01, 2019 6:30 AM  PT
Fangdd Ready to Lift Off as "DUO" on Nasdaq, Raises $78 Million
author: CapitalWatch Staff   

Fangdd Network Group Ltd. (Nasdaq: DUO), China's largest online real estate marketplace, has priced its American depositary shares at $13 ahead of a floatation on the Nasdaq Global Market anticipated on Friday.

The offering of 6 million ADSs raises $78 million for Fangdd, according to the company's statement. Underwriters may purchase up to an additional 900,000 ADSs after the IPO.

Fangdd awaits to lift off under the ticker symbol "DUO."

Bookrunners on the offering are Morgan Stanley & Co. LLC, UBS Securities LLC, China International Capital Corp. Hong Kong Securities Ltd. and AMTD Global Markets Ltd.

In its prospectus, amended on Oct. 31, Fangdd said it intends to use the proceeds of the sale to boost its R&D, sales and marketing. The rest will be used for working capital and general corporate purposes.

The tech-driven mobile platform offers smart tools and solutions for real estate agents in China. It had 1.07 million registered agents on the platform as of June 2019. In addition, Fangdd operates the largest online database of properties. It had 131 million properties as of June, the company reported.

In his financial analysis of Fangdd, CW columnist and founder of VentureDeal, Donovan Jones, wrote, "DUO's financials show a firm that is growing topline revenue and gross profit impressively and has produced comprehensive income and positive cash flow from operations in the most recent period."

Fangdd reported revenue of $233.7 million for the six months through June, soaring 55% year-over-year. Profit during the first half-year hit $14.2 million in contrast to a net loss of approximately $600,000 in the corresponding period of 2018.

Founded in 2011, Fangdd is backed by Shanghai-based private equity fund Vision Knight Capital. The head of the fund and former chief executive of Alibaba Group Holding Ltd. (NYSE: BABA), David Zhe Wei, is now a director on the board of Fangdd.

Jones also said, "If Fangdd can continue to grow as a prominent online real estate marketplace, perhaps it can turn around a growing perception problem among U.S. investors in Chinese firms."

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