Wise Talent Information Technology, the parent company of Chinese executive headhunting site Liepin.com (猎聘), is seeking to raise as much as $400 million U.S. in an upcoming Hong Kong IPO. The IPO value has been halved from the $800 million U.S. reported by IFR Asia, a Reuters publication, in January.
Launched in 2011, Liepin is coming off a red-hot 2017 which saw revenues jump 40 percent year-over-year to 825 million RMB ($128.4 million U.S.), catapulting the company to the position of China’s largest jobs vertical by revenue. Costs, however, are still sky high, and 2017 was also the first time in three years that the company had been profitable, posting a net income of just 7.55 million RMB.
Wise Talent, backed by venture capital firm Matrix Partners China, plans to sell 88 million shares at an indicative price range of HK$28.5 to HK$35.5, it announced on Friday.
Liepin offers a mixture of recruitment and headhunting (in Chinese, “liepin” literally means “headhunting” in the professional sense). It closed a series D investment round worth $100 million U.S. in June 2016, which saw the platform valued at a stunning $1 billion U.S.. The round was led by the China Mobile Innovation Industry Fund, who had previously only invested in one other company (it has since invested in Ninebot and RootCloud, according to Crunchbase).
With relatively stiff criteria for acceptance as a job-seeker on the platform, Liepin targets middle managers up to senior executives at Forbes 500-level companies. The company had 3.9 million registered members at the end of last year, according to its prospectus. It charges a fee from its professional member companies, who are then able to post jobs, download resumes, and reach out to potential employees through their subscription (see here).
“We want to take advantage of this opportunity and the appetite for high-end talent,” Rick Dai, chairman, CEO and founder of Wise Talent, told a press conference in Hong Kong on Friday; adding that the IPO was well-timed because of the rapid growth in Chinese tech start-ups and innovation.
Dai said the company wants to increase its domestic market share by adding more companies and individual users. He said the reason for choosing Hong Kong as a listing destination was because “the IPO will have a good effect on the brand and bring a more open and public image to our customers, and help improve trust and build partnerships”.
Around 40 percent of the IPO proceeds will be used to enhance research and development capabilities, like hiring AI and data specialists to improve existing matching algorithms and develop AI-empowered voice and facial recognition technologies to interview potential job candidates via robots.
About 25 percent will be used for potential acquisitions or investments, 25 percent in improving sales and marketing initiatives, and the remaining 10 percent for working capital purposes.
Initial reporting: South China Morning Post