Chinese Edtech Firm Set to Kickstart US IPO Push in 2023

A Chinese firm providing digital adult learning services is set to be the first from the nation to list in the US this year, testing investor appetite after Beijing tightened oversight over its battered online education sector.

(Bloomberg) — A Chinese firm providing digital adult learning services is set to be the first from the nation to list in the US this year, testing investor appetite after Beijing tightened oversight over its battered online education sector.

QuantaSing Group Ltd. is considering to start taking orders for a New York offering as soon as Thursday, Bloomberg News reported. The firm plans to raise less than $50 million, potentially the largest Chinese initial public offering in the US since Atour Lifestyle Holdings Ltd. in November.

Deliberations are ongoing and the timing and terms of the deal could still change, people with knowledge of the matter said.

Chinese IPOs in the US almost vanished last year on the back of a wide crackdown from Beijing on private enterprise, including the so-called edtech companies. Increased regulatory scrutiny by the US also hurt overseas share sales.

A successful listing by QuantaSing could pave the way for more Chinese issuers to follow, just as investor sentiment is improving following President Xi Jinping’s Covid Zero exit. A hurdle could be the ongoing scrutiny on the private tutoring sector — even as grips are loosening for the broader tech sphere.

Regulators recently published a new set of restrictions for private tutoring services. The latest move follows a surprise crackdown in 2021 to ban those companies from making profits, raising capital or going public.

The last education-linked company to sell new shares in New York was Beijing-based Jianzhi Education Technology Group Company Ltd. The IPO raised $25 million in August.

Hesai Technology Co., a Chinese developer of sensor technologies used in self-driving cars, could follow QuantaSing’s offering as it is planning to file for a US IPO that could raise about $150 million. If the listing materializes at that size, it would be the largest Chinese IPO since DiDi Global Inc.’s disastrous debut in the US in June 2021 — excluding listings by special purpose acquisition companies, according to data compiled by Bloomberg.

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