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SoftBank-backed OneConnect halves valuation ahead of IPO

By Yana Berman

Shenzhen-based tech company aims to raise half the original $504m it targeted in US stock market debut

SoftBank-backed OneConnect has slashed its valuation by around half ahead of its US market debut, according to a stock exchange filing.

The company, the financial services unit of Chinese insurer Ping An, now aims to raise up to $260m (€233m/£197m). This is almost half the original $504m it had targeted. It targets a market capitalisation of $3.5bn.

The valuation is less than half the $7.5bn Ping An said its Shenzhen-based unit was worth last year when it raised $650m from investors that included Japan’s SoftBank.

The news is a further setback for the investment arm of the Japanese technology company, following the failed IPO of workspace company WeWork.

SoftBank ended up bailing out WeWork with a $9.5bn rescue plan that valued the company at $8bn, far lower than its $47bn peak.

OneConnect had been expected to raise as much as $2bn in a public listing that was switched from Hong Kong to New York.

Other companies in SoftBank’s $100bn Vision Fund portfolio have also been struggling with shares down around 40 per cent from their earlier highs. These include Slack and Uber, which went public earlier in 2019.

Their underperformance led the Japanese group to report an operating loss of almost $9bn in the quarter to September.

Softbank shares closed 1 per cent higher in Tokyo at 4,334 yen.

FURTHER READING: SoftBank attempts to take control of WeWork

FURTHER READING: London’s fintech sector attracts record levels of US investment in 2019

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