As we take a look at US IPO action for the week ahead, Chinese regulators have unveiled efforts to help companies list overseas. Friday saw The China Securities Regulatory Commission announce that companies looking to IPO abroad will have to adhere to national security and data privacy regulations.
The new rules follow a number of issues relating to Chinese companies listed on US exchanges. For example, a new law passed in 2020 required Chinese companies to allow US regulators to check their books. This issue almost led to a significant number of Chinese stocks being de-listed from US exchanges.
Refinitiv data reported by Reuters shows that Chinese companies raised nearly $230m in US listings last year, down from $12.85bn in 2021. Could new regulations stimulate a revival in the number of Chinese companies opting to list overseas? Time will tell.
With that in mind, let's examine companies that could list in the coming days.
This week's potential IPOs include a Chinese components e-commerce website and a fintech platform aiming squarely at the advertising industry.
ICZOOM Group
The business is offering 1.5 million shares of its Class A common stock. The expected price for these shares is $4.00 to $5.00 per share. The stock will trade on the NASDAQ under the ticker symbol ‘IZM’.
These shares offer holders one vote per share, while Class B shareholders have ten times the voting power.
What is ICZOOM Group?
ICZOOM is a Chinese company that operates a B2B e-commerce platform. This platform primarily acts as a marketplace for electronic components to small and medium size enterprises in its domestic market.
In order to use the marketplace, customers or suppliers register as users. Then they can place adverts for their components or begin searching for what they need. They then order the goods through ICZOOM’s site, and the company handles logistics/delivery as well.
The company believes this model gives it a competitive edge. This is because it is not competing with registered suppliers, and goods are available to customers at a low markup. In its fiscal 2022, the company recorded approximate revenues of $290m. It also said it had a total of 1,012 registered suppliers and 1,051 registered customers.
Looking ahead, the business aims to increase the number of registered users on its platform. It also seeks to further invest in its SaaS system in order to support growth.
Who is Leading the IZM IPO?
The Benchmark Company, LLC, is leading ICZOOM Group’s IPO.
IZM IPO Use of Proceeds
The company says it intends to use the proceeds in the following manner:
20% for sales and marketing.
20% for research and development.
10% for logistics and warehousing capabilities.
50% for working capital.
NYIAX
This business is joining the NASDAQ index under the ticker symbol ‘NYX’. It is selling 1.85 million shares of common stock. The estimated initial public offering price per share of the company’s common stock is $5.00 per share.
What is NYIAX?
NYIAX is a fintech business with its sights set on the advertising industry. The company says it aims to usher in a new era of financial platform technology within the industry and beyond.
The company operates a platform which employs smart contracts and blockchain technology as a core ledger. NYIAX says this enables contract formation, compliance and reconciliation. As such, the company argues that its product allows for the automation of complex and outdated contract processes to its clients.
The platform was developed and patented in partnership with Nasdaq.
The business says its current market mission is to connect buyers and sellers of media through trusted, secure and efficient transactions.
Explaining this decision, the business points to what it calls the “complex technology ecosystem that has been developed and designed to monetize every available, perishable ad impression and unit of audience data".
It says the ad-tech ecosystem has yet to address direct advertising, guaranteed advertising and agency or advertiser discounted advertising. As such, these are mainly sold directly by media sellers through archaic methods. Physical contracts are being negotiated, signed, and sent between parties by communication channels such as fax, email and mail. NYIAX has therefore identified the process as ripe for an update.
Who is Leading the NYX IPO?
The listing is being helmed by Boustead Securities LLC and WestPark Capital Inc.
NYX IPO Use of Proceeds
Without specifying defined splits and proportions, NYIAX has earmarked the proceeds from the offering as follows:
General corporate purposes, including working capital, capital expenditures, and operating expenses, including expanding the business development team.
Development of new applications and features for, and enhancements of, our technology platform
Acquire complementary businesses or technology.
Hire additional resources to support our product development.