In the sea od IPOs and SPAC mergers there was one IPO that did not got the attention it deserves on Wednesday. Boqii Holding ADR (BQ) stock closed below first trade after NYSE debut.
BQ stock price went from $10 all the way down to $7.20 which is almost 30% lower than the open price. But here are the reasons why you should keep an eye on this pet related stock, especially if the shares fall below $5.
- Boqii.com has 23 million registered users
2. Big players backed BQ already before IPO
Among them, Goldman Sachs is the organization that has participated in the most rounds. In June 2013, Goldman Sachs invested for the first time, and in 2014 followed up with a $25 million Series B financing. Two years later, Boqii.com announced that the C round of financing with a total amount of US$102 million had been fully paid, led by China Merchants Bank, and the original investors Goldman Sachs followed the investment. In June of this year, Boqii Pet completed more than US$60 million in overseas financing, which was the last round of financing before its IPO.
3. First mover advantage
Boqii is the 12-year entrepreneurial story of three founders.
Tang Yingzhi first met Liang Hao and Chen Di in a QQ (instant messaging service) group. At the end of 2007, Tang Yingzhi and Liang Hao had just come out of Tencent. One of them was all about technology and the Internet, and the other was experienced in finance and capital operations. Unlike them, Chen Di, a veterinarian, was already a product manager for a pet website.
After raising pets for many years, these three young entrepreneurs had a deep understanding of the pain points of China’s pet market and discovered the huge potential that has not been tapped in this industry. They decided to create the best pet site in China.
Their journey started from an office of only over 80 square meters. In this small office space, a team of nearly 20 people including product, development, procurement and customer service departments worked together.On the second day after the website went live, Porch Pet received the first order.
“We were the first company in the industry to be determined to do e-commerce. This was back when many pet websites were still discussing market scale, warehousing, distribution, and supply chain,” Tang Yingzhi once said.
4. Industry with a huge potential
The entire pet industry comes with a huge potential. Hillhouse Capital, Fortune Capital, Tencent, Qiming Venture Capital, Morningside Capital, Shunwei Capital and many other well-known Chinese VCshave already entered the market.
Boqi Pet’s IPO in the United States opened the tip of the iceberg in China’s pet business. Frost & Sullivan predicts that from 2019 to 2024, the compound growth rate of the number of pets is about 8.1%; the compound growth rate of the pet industry market is about 17%; the growth rate of the pet food and pet supplies market is about 15.4%; The compound growth rate of the service market is approximately 19.6%.