Alibaba-Backed Delivery Startup GogoX Navigates a Tough IPO Market


The go-go days are over for Hong Kong’s IPO market.

GogoX Holdings Ltd. is the kind of startup that might once have received a warm reception from investors in the city as a tech-enabled logistics platform backed by


Group Holding Ltd.

But on Friday, it made a lackluster debut on the city’s stock exchange after raising just $85 million in a scaled-back IPO. And while GogoX had engaged 11 banks for the initial public offering, it relied heavily on one buyer—a subsidiary of Chinese car company Chery Holding Group Co. which bought $50 million of stock.

Investors have eschewed new deals as markets contend with surging inflation, rising interest rates, Russia’s invasion of Ukraine and China’s regulatory crackdown on homegrown technology companies. Companies have raised $2.44 billion so far this year in Hong Kong through new and secondary stock listings, down from $27.76 billion a year ago, according to Dealogic.

Beijing-based GogoX priced its IPO at 21.50 Hong Kong dollars a share, the equivalent of $2.74, giving it a market capitalization of about $1.69 billion. The stock had fallen 9% by late afternoon Friday.

During earlier pre-deal dialogue with investors, GogoX had been looking to raise about $100 million to $200 million, a person familiar with the matter said.

Chery was one of two cornerstone investors that together bought 74% of the whole deal. Cornerstone investors commonly support Hong Kong IPOs, committing to invest a fixed dollar amount wherever a deal prices, and to hold on to their shares post-IPO.

GogoX connects companies and individuals with truck and van drivers to deliver freight and goods within the same city. It operates in more than 340 cities in mainland China, Hong Kong, Singapore, South Korea and India.

The company reported a loss equivalent to $130.3 million for 2021, wider than the year before. Financial data going back to 2018 in its prospectus shows it has been unprofitable for all of that period, and the company said it expects to continue reporting losses through at least 2024 due to its planned business investments.

GogoX chose to push ahead with the IPO to shore up more resources for its growth, Chief Executive Steven Lam said, with about 40% of its net proceeds directed at expanding its user base and strengthening its brand.

“The market right now may be a little bit challenging,” but the IPO would benefit the company in the long run, Mr. Lam said after the listing ceremony, which was the first to be held in person at the Hong Kong stock exchange since October 2021.

Hong Kong’s stock-exchange operator has about 180 companies in the pipeline that have filed to go public, a figure that is close to an all-time high, said

Nicolas Aguzin,

CEO of

Hong Kong Exchanges & Clearing Ltd.

“The markets seem to be warming up, at least the markets in our region,” Mr. Aguzin said, adding that “we have seen a very soft sentiment over the last few months globally.”

After the IPO, companies controlled by Alibaba will have a near-15% stake in the company, the GogoX prospectus showed. A subsidiary of Chinese classified-ad site Inc. will hold nearly 48%.

Write to Dave Sebastian at [email protected]

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