Two Chinese startups suspended public listing plans in the U.S. in light of China’s crackdown on domestic companies looking to list overseas. Medical data firm LinkDoc Technology and digital fitness platform Keep have both pulled out following regulators’ probes into ride-hailing giant Didi Global, according to separate reports from the Financial Times and Reuters on Thursday (July 8).
Sources told Reuters that LinkDoc was in the midst of filing for a $211 million initial public offering (IPO) in New York but scrapped the plans after Beijing pulled Didi from app stores and from payment platforms WeChat Pay and Alipay. The move against Didi from Chinese regulators came just two days after it went public in the U.S.
LinkDoc is likely the first Chinese startup to have retreated from its IPO plans as China’s regulatory agencies stepped up Big Tech oversight. The move by officials prompted investors to unload Chinese stocks listed in the U.S.
Analysts told Reuters that despite the fact that U.S. public listings are not forbidden, the move by LinkDoc is expected to spark a pull-out by additional Chinese companies with U.S. IPO plans.
The news of LinkDoc ran parallel to the decision by Keep to pull its $500 million U.S. IPO endeavors as Beijing intensified its policing of technology platforms in China. The popular Chinese fitness app Keep is backed by Japan’s SoftBank and China’s Tencent and was looking to raise $500 million, sources told FT.
The truck-hailing app Full Truck Alliance and online recruiter Boss Zhipin are two of the many Chinese companies that filed plans to go public in New York IPOs this year and are being subjected to intense scrutiny.
The Chinese podcast platform Ximalaya recently suspended its U.S. IPO, according to a source, per FT.
“After communication with the relevant regulators, Ximalaya understands that a Hong Kong listing would be regarded as a preferred outcome,” the source told FT.
China’s crackdown on Didi following its U.S. IPO is seen as an example of the great lengths the Chinese government will pursue, even if a company has a high-profile name and numerous foreign investors.