GOGOX, a Hong Kong-based company that runs as the first app-based logistics platform for delivering goods in Asia, might be planning to IPO fairly soon. According to the company’s sources, who asked to remain private, the potential IPO could raise anywhere between $400 million and $500 million and may happen as soon as this year.
As of now, GOGOX has begun preliminary discussions with several investment banks for possibly going public in Hong Kong. In addition, the company may also consider merging with a special public acquisition company (SPAC) in the United States for it to IPO. SPACs exist for the purpose of raising money through an IPO to eventually acquire another company; they have zero existing business operations and the use of SPACs skyrocketed in the midst of the COVID-19 pandemic.
The Specialties of GOGOX
GOGOX first launched in 2013 under the name GOGOVAN and rebranded in 2020. Co-founders Steve Lam, Nick Tang and Reeve Kwan were working on packing lunch box deliveries through van dispatching call centers, but one day, saw that they had thousands of orders to fulfill. From there, they decided that they wanted to help provide an alternative solution to the current call center business model.
The app’s service soon proved both beneficial and consistent; while regular van call centers in Hong Kong took 20 to 30 minutes, the GOGOVAN app requested vans in 10 to 15 seconds. In the last almost-eight years, GOGOX has expanded within Asia to Singapore, Mainland China, Taiwan, South Korea and India, and plans to continue more of its growth globally.
Through several funding rounds, as well as receiving some funding from tech giant Alibaba, the company passed the $1 billion valuation mark, becoming Hong Kong’s first unicorn startup.
The Rise in Funding for Hong Kong IPOs
GOGOX is one of several Hong Kong companies that are looking to or have gone public this year. Especially in the first quarter of 2021, Hong Kong saw a rise in funding for IPOs—an 822 percent rise; the large jump pushed the Hong Kong Exchanges and Clearing (HKEX) to second place behind NASDAQ for IPO global rankings.
Analysts say that the rise will continue into Q2 as several firms already filed their IPO listing applications. It also comes following tensions created between Washington, D.C. and Beijing during the Trump Presidency; recently, senior officials from the White House and China traveling to Alaska to meet and discuss the new strained relationship.
The dispute between the countries is said to have created benefits to Hong Kong’s IPO market as it had U.S.-listed Chinese companies—like search engine Baidu—take on secondary listings.