Nigeria-focused fintech OPay abruptly withdrew its $304 million US initial public offering on Oct. 30, hours after pricing, following a Chinese regulatory inquiry that caught its bankers and advisers by surprise, people close to the transaction told Semafor. The company said the jurisdiction involved is immaterial to its core operations and expects a resolution in the near future.
The intervention was unexpected because OPay, founded by Chinese billionaire Zhou Yahui, is headquartered in Singapore and generates 90 per cent of its revenue in Nigeria, with no operating business or revenue in mainland China, people close to the deal said. The company's prospectus had flagged uncertainty over whether it might need approval from Chinese regulators, but it stated it did not believe approval from the China Securities Regulatory Commission was required, citing advice from Chinese legal counsel.
Advisers were caught off guard by the inquiry, with one calling it "a disaster for everyone." The same sources pushed back against suggestions that the IPO had been priced too aggressively. OPay set 16 million American depositary shares at $19 each, the bottom of its $19-$21 target range. The shares were indicated to open below that price, but the company withdrew before trading began.
China International Capital Corporation's Hong Kong securities business had been listed among the transaction's bankers in earlier documentation, alongside Citigroup, Deutsche Bank and South Africa's Standard Bank. CICC was absent from the underwriters list accompanying Friday's announcement, a detail that may have been an early indication of complications.
OPay said the inquiry concerned a jurisdiction "immaterial to the Company's core business operations" and that it expected the matter to be resolved satisfactorily in the near future. It has not announced a revised timetable for a listing.
For African investors and technology founders, the hope will be that OPay's setback proves an isolated complication rather than another obstacle to attracting international public-market capital. After years of difficult fundraising conditions, the continent's venture industry needs successful exits and public listings to persuade investors that its technology businesses can deliver returns at scale.
Analysis
Why This Matters
- The regulatory intervention signals that Chinese authorities may exert control over companies with Chinese founders, even those with no mainland operations, affecting global listings.
- For African tech, the failed IPO could dampen investor confidence in the region's ability to generate successful public-market exits.
- The abrupt withdrawal and its timing suggest unexpected regulatory risks that could affect other cross-border fintech listings.
Background
OPay is a Nigerian-focused fintech backed by Chinese billionaire Zhou Yahui. Its prospectus for the New York listing had flagged potential Chinese regulatory hurdles, but its Chinese legal counsel advised that approval was not required. The company had sought to list on the New York Stock Exchange to raise capital for African expansion.
Key Perspectives
People close to the transaction: said advisers were caught off guard and one called the outcome "a disaster for everyone."
Those close to the deal: pushed back against suggestions that the IPO had been priced too aggressively.
OPay: said the inquiry concerned a jurisdiction "immaterial to the Company's core business operations" and that it expects the matter to be resolved satisfactorily soon.
What to Watch
- Whether OPay announces a revised timetable for a US listing or abandons the plan entirely.
- If other African fintechs with Chinese-backing face similar regulatory scrutiny.
- Any response from Chinese regulators clarifying jurisdiction over foreign listings by companies with Chinese founders.
