Sep 23, 2020 09:27 PM

Segway Owner Set to Make History With STAR Market IPO

Electric-scooter maker Ninebot Ltd. has had its application for an IPO on Shanghai’s Nasdaq-style high tech board passed by the securities regulator, a move that paves the way for Chinese mainland stock markets to pass two significant milestones.

Ninebot, which owns the Segway scooter brand, will become the first foreign-registered Chinese company with a variable-interest entity (VIE) structure to go public, and the first to sell Chinese depositary receipts (CDRs), a new type of equity security created in 2018 to allow overseas firms to list on a mainland bourse.

The China Securities Regulatory Commission (CSRC) gave the final blessing to the IPO on Tuesday. In a statement (link in Chinese) on Tuesday, the commission said it agreed to Ninebot’s application which will be valid for 12 months. The company must sell its CDRs strictly in accordance with the approved prospectus and other IPO documents, it said.

Registered in the Cayman Islands, Beijing-based Ninebot is one of dozens of Chinese companies that have used the VIE structure to get around government restrictions on foreign direct investment in certain industries such as telecommunications and the internet. Under a VIE, a mainland company sets up an overseas-registered company and uses contracts to maintain control over its mainland-based units that hold most of its valuable assets, including licenses. Many Chinese tech firms, such as Tencent Holdings Ltd. and Baidu Inc., use the VIE arrangement.

The Chinese authorities had barred companies with such a structure from listing on the mainland but scrapped the rule for the STAR Market when it was set up in 2019 in order to attract overseas-listed technology groups back home. Regulators also allow unlisted VIE-structured companies with rapid revenue growth and self-developed cutting-edge technologies to list on the board, hoping they will choose to stay in China rather than conduct an IPO abroad.

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Ninebot is backed by Chinese electronics giant Xiaomi Corp.; venture capital firm Sequoia Capital China GF Holdco III-A, Ltd., a unit of venture capital firm Sequoia Capital China; and Intel Capital Corp., part of U.S. tech giant Intel Corp. Xiaomi, which holds a 10.91% stake in Ninebot, is also one of Ninebot’s key clients. Related-party sales to Xiaomi accounted for more than half the company’s revenue in 2019, according to its prospectus.

Ninebot, the parent of American personal-transporter manufacturer Segway, applied for its IPO in April 2019. The application was first passed by the listing committee of the Shanghai bourse’s STAR Market in June this year before moving on for the final green light from the CSRC. The company plans to raise more than 2 billion yuan ($295 million) through the issuance of as many as 7.04 million A-shares to its custodian bank, Industrial and Commercial Bank of China Ltd., which will then sell the company’s CDRs to domestic investors at a ratio of 10 CDRs to one ordinary share, according to the latest version of the prospectus (link in Chinese) released to the Shanghai bourse in July.

Ninebot is one of the world’s largest suppliers of electric scooters and hit the headlines in 2015 when it paid $60 million for Segway, a U.S. company whose founder had developed a two-wheel self-balancing personal transporter. The company has been unprofitable in each of the past three years, although its net loss narrowed to 459 million yuan in 2019 from 1.8 billion yuan in 2018, its prospectus shows.


Ninebot’s main markets are the U.S. and Europe as many regions across China restrict the use of electric scooters on the road. Even so, domestic demand has been steadily increasing over the past few years, the prospectus shows.


Denise Jia contributed to this report.

A previous version of this story gave the incorrect number of A shares that Segway-Ninebot planned to issue. It planned to issue about 7.04 million of the shares.

Contact reporter Tang Ziyi ( and editor Nerys Avery (

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