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China Approves First Overseas Listing of VIE-Structured Firm

China's securities regulator approved CheChe Technology Inc.'s U.S. listing plans on Sep. 14, 2023, marking the first time since the China Securities Regulatory Commission (CSRC) introduced new overseas listing rules that it has approved the overseas listing plans of a VIE-structured (domestic variable interest entities) firm. CheChe is also the first company to be approved by the CSRC for listing as a special purpose acquisition company (SPAC) whereby an unlisted firm acquires a listed firm in order to become listed without executing its own initial public offering.

A VIE-structured firm is a firm controlled by the investor through a contractual relationship rather than direct ownership, meaning the investor does not have majority voting rights.

According to information gathered by RTHK, CheChe was founded in 2014 as an InsurTech company. It was the first mainland Chinese company to engage in digital auto insurance transactions and has received over RMB 1 billion in venture capital from Tencent and other companies. It executed the transaction documents to merge with Prime Impact Acquisition I, an overseas SPAC, in early 2023.