Cathay Capital Backs the NYSE IPO of ATRenew, One of the Pioneers of the Circular Economy in China
July 1, 2021
June 18, ATRenew Group (Aihuishou International) (NYSE: RERE), China’s largest consumer electronics collection, recycling and trading platform, officially listed on the New York Stock Exchange (NYSE). This is the first listing of a Chinese specialist of the circular economy on the NYSE. This operation enabled the Group to raise $261 million on the basis of a $3.6 billion valuation. The proceeds of the IPO will be used to further enhance ATRenew’s technology, to provide more diversified platform services, to expand its store network, and to develop new distribution channels. Cathay Capital, through its SmallCap III fund, has supported ATRenew’s exceptionally fast growth by contributing to a first capital increase in December 2016, and then to a second one in 2018. During these four years ATRenew’s revenues increased from RMB 1185 million ($184 million) to RMB 4858 million ($752 million).
Founded in Shanghai in 2011, ATRenew, or “All Things Renew”, quickly established itself as a leading player of the circular economy, especially in China, by organizing the collection, reconditioning and sale of consumer electronics. The company has progressively consolidated its leadership thanks to the development of a truly unique technological platform, of an omnicanal (online / offline) and multimodal (B2B2C, C2B, C2C…) business model fully integrated vertically. Also present in the US, Japan and India, ATRenew is the only Chinese collection and reconditioning platform for second-hand consumer electronics active overseas. Driven by the vision of its founders, the company has considerably improved the efficiency of the entire industry while responding to the concerns of the younger Chinese generation for more responsible consumption.
With a network of more than 750 shops and 1,500 self-service stations in more than 170 Chinese cities, ATRenew ranked first on China’s second-hand consumer market in 2020, both in terms of the number of transactions and gross merchandise volume (GMV). Ten years after its inception, the company achieved a turnover of more than 4.9 billion RMB in 2020, recording a Year-on-Year growth of more than 38.2%.
Xuefeng Chen, founder and CEO of ATRenew said in his letter to investors: “As the three major business lines, Aihuishou, Paijitang and Paipai, continue to be integrated and synergized, the flywheel for sourcing and boosting supply and demand is getting stronger, providing us with the momentum for future growth, like a deepened moat to reinforce our business.”
Bringing a new, environmentally responsible, business model to China – Combining Commercial Success with Social Value Creation
With the mission of giving a second life to consumer electronics products, the founding team of ATRenew believes that “environmental challenges can be addressed while achieving commercial success”. The company has uniquely and successfully executed on this by extending products’ life cycle, thus reducing electronic waste while fostering the global circulation of value-for-money and of certified second-hand devices. Convinced that the value of a business also lies in solving social and environmental problems, it operates on the basis that the greater the social contribution, the greater the economic value of the business.
Similarly, Cathay Capital is committed to supporting companies that promote the sustainable growth and transformation of economies. Over the past four years, Cathay has been very involved in the support of ATRenew, accompanying the company throughout its very successful journey to the listing on the NYSE.
Lanchun Duan, Managing Partner of Cathay Capital: “From a startup to China’s largest trading and service platform for second-hand consumer electronics, ATRenew has provided thousands of users with a better, more convenient and low-cost experience while continuously contributing to the global low-carbon movement and the sustainable development of China’s economy. Congratulations to the entire ATRenew team on its successful IPO! Cathay Capital will stick to its conviction of “Being Useful” and continue to support ATRenew in its rapid global expansion. We believe that there is huge potential in China’s used electronics trading and service market to further deepen the ‘flywheel effect’ with the rise of integrated, end-to-end platforms and we look forward to continuing our support for socially responsible companies such as ATRenew.”
About Cathay Capital
Cathay Capital Group is a global investment firm supporting companies at all stages throughout North America, Asia, Europe and Africa. By helping navigate the opportunities of globalization and sustainable transformation, Cathay is the partner of choice for companies aspiring to lead markets and make a positive impact. Its global platform connects people – from investors and entrepreneurs to management teams and leading corporations – across continents to share knowledge, the tools to scale, and achieve the extraordinary. Founded in 2007 with a strong entrepreneurial heritage, Cathay Capital now manages over $4,2B in assets, has completed over 180 buyouts, growth and venture capital investments with the global reach and local expertise across Paris, London, Munich, New York, Boston, San Francisco, Shanghai, Beijing, Singapore and Shenzhen.