Lianlian applies to revive its Hong Kong IPO as Ant Group’s rival takes a second stab at raising funds

Lianlian DigiTech has applied to revive its initial public offering (IPO) in Hong Kong, as the provider of cashless payment services and competitor to Ant Group takes a second stab at raising funds.

The Hangzhou-based company, which had reportedly sought to raise US$500 million last June, said it would use the proceeds from the IPO to enhance its technological capabilities and to expand its global business operations over the next five years, according to a filing to the Hong Kong stock exchange.

The 15-year-old company did not divulge the amount it is seeking to raise. Bankers expect the haul to be less than the amount previously sought because of the current draught in fundraising and market slump.

Lianlian has raised funds through several funding rounds from Boyu Jingtai, Everbright Investment, China International Capital Corp. (CICC), Sequoia Zhensheng and other investors. CICC and JPMorgan Chase & Co. are the sponsors and the overall coordinators for the IPO.

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It’s a challenge for Hong Kong’s market to support an IPO this size, said a banker in the city who is uninvolved in the deal, declined to be named.

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China’s fourth-largest baijiu distiller ZJLD Group and biologic drugs services company Wuxi Biologics’s unit Wuxi XDC were the top two largest IPOs in the city last year, raising HK$5.31 billion (US$676.4 million) and HK$4.07 billion respectively.

Lianlian will use the capital raised to construct an advanced modular distributed payment platform based on business process as a service (BPaaS) solutions, enhance its risk management platform using generative artificial intelligence, and develop a scalable distributed cloud-based data centre, among other plans. The company is also looking to expand in Southeast Asia, the Middle East and South America.

Founded in 2009, LianLian said it has the broadest global licence coverage and is the only licence holder for every US state among all the China-based digital payment solution providers, according to market research company Frost & Sullivan. It has 64 payment licences and certifications worldwide as of the end of 2023 and operates in over 100 countries to support more than 130 currencies.

Still, the company remains unprofitable, posting a 2022 loss of 916.9 million yuan, with 606.7 million yuan of losses in the nine months through last September.