On-demand Logistics Startup Lalatech Applies for Hong Kong IPO
On-demand logistics startup Lalatech, which operates Lalamove and Houlala, on March 28 applied to be listed on the Hong Kong stock exchange. Goldman Sachs (Asia) Limited, Merrill Lynch (Asia Pacific) Limited and J.P. Morgan Securities (Far East) Limited act as joint sponsors.
Lalatech, established in Hong Kong in 2013, offers a comprehensive transportation solution for both intra-city and cross-city freight. In addition to this, the platform also provides value-added services like car rental and sales exclusively for truck drivers.
Lalatech’s valuation has soared to $10 billion after securing a $1.5 billion round F financing led by Sequoia Capital China and Hillhouse Capital in 2021. As per the prospectus, Lalatech closed another funding round G of $230 million in 2022.
Previously, it was unclear when and where Lalatech would go public. The company had initially planned an IPO in the US for 2021 but reportedly changed its plans to list on the Hong Kong stock market following Didi’s data security review. Despite this, Lalatech has consistently stated that it is “continuously monitoring the capital market” without any specific plans or timetable for going public. The company has now revealed its plan to go public.
Lalatech is currently the leading logistics transaction platform with a global market share of 43.5% in the first half of 2022, as reported by Frost & Sullivan. The prospectus further discloses that Lalatech facilitated over 428 million orders and generated a global freight GTV of $6.715 billion in the same year. Additionally, there has been an increase in average monthly active users from 7.3 million to 11.4 million and average monthly active drivers from half a million to one million between 2020 and 2022.
Lalatech has followed a two-pronged approach of domestic and international development since its inception. In 2014, it entered mainland China while simultaneously expanding into overseas markets like Southeast Asia and Latin America under the brand name Lalamove. Presently, Lalatech operates in over 400 cities worldwide.
The prospectus showed that in 2020, 2021 and 2022, the revenue of Lalatech (including Lalamove) was $529 million, $844 million and $1.036 billion respectively, with an average annual compound growth rate of 39.9%. In 2022, Lalatech achieved profitability for the first time.
SEE ALSO: Digital Freight Platform Logory Logistics Debuts on HKEx
There is further room for growth in both domestic and overseas freight markets. According to Frost & Sullivan, it is expected that China’s road freight market will grow at a compound annual growth rate of 7.6% from 2022 to 2027, while the GTV of road freight in Southeast Asia and Latin America is expected to grow at a compound annual growth rate of 4.9% from 2022 to 2027.
Lalatech’s prospectus reveals plans to expand into the Middle East market and explore new business opportunities in electric commercial vehicle research and development, building on their existing experience in vehicle leasing and sales.