Chinese Social E-Commerce App Xiaohongshu Denies Plan to List in Hong Kong

xiaohongshu
(Source: VCG)

On Monday, several media outlets reported that Chinese startup Xiaohongshu, or “Little Red Book,” is considering a Hong Kong initial public offering to raise at least $500 million, after putting its U.S. listing plans on hold. The company responded that it won’t do away with the idea but there is no clear IPO plan for the time being.

Founded in June 2013, Xiaohongshu calls itself a lifestyle content platform. Users can record their lives, share their lifestyles and form interactions based on their interests by way of short videos, pictures and texts.

The company has received five rounds of financing since its founding. Among them, in March 2016, it received an initial cash investment from Tencent worth $100 million, and in June 2018, it received investment from Alibaba totalling more than $300 million in Round D financing.

According to Analysys, as of February this year, Xiaohongshu had 138 million monthly active users and over 55 million daily active users. Among them, 70% of users are post-90s.

Xiaohongshu has been rumored as of late to be listed this year. In March 2021, Yang Ruo, former managing director of TMT investment banking team of Citigroup in Hong Kong, joined Xiaohongshu as CFO of the company. This is regarded as a prelude to Xiaohongshu listing in the United States.

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However, the company said at that time that Yang was responsible for the formulation of the company’s financial strategy and financial management, and it currently had no listing plan. In July, news emerged that the company would suspend its listing in the United States.