Quhuo (NASDAQ: QH), a Chinese firm which develops workforce management solutions for companies that employ gig workers, started trading on Nasdaq on July 10 after securing USD 330 million in its initial public offering (IPO). It issued 3.3 million American depositary shares (ADSs) at USD 10 under the symbol QH.

On its first trading day, QH’s stock price surged to USD 22.99 at its peak and settled at USD 12.77 to close the session with a 27.7% rise. The company now has a market capitalization of USD 580 million, according to MarketWatch.

Founded in 2012 by a trio of ex-DHL entrepreneurs—Leslie Yu Yang, Yang Shuyi, and Ba Zhen—Quahuo makes software that helps companies manage their employees. Most of its clients, which include Meituan and Ele.me, are in the food delivery, ride-hailing, house cleaning, and bike-sharing industries.

Citing a report by consultancy Frost & Sullivan (F&S), the company said in its prospectus that it has the highest number of average monthly active workers of all industry competitors. By the end of 2019, it had 40,800 monthly active workers on its system.

The prospectus shows Quhuo’s biggest external investor is Baidu, which holds 11.46% of shares and 4.56% voting power, followed by SBCVC (SoftBank China Capital) and ClearVue, with 11.24% and 6.97% shares respectively.

Quhuo’s revenue last year was RMB 2.1 billion (USD 295.3 million) and, in the first three months of 202o, it increased by 12.6% to RMB 392.6 million (USD 56.4 million) from the same period in the previous year.

Notably, almost all of its revenues in the first quarter came from on-demand food delivery solutions—although it also offers shared-bike maintenance, ride-hailing, and housekeeping solutions.

“Our high customer concentration exposes us to all of the risks faced by our major customers and may subject us to significant fluctuations or declines in revenues,” the company said in its prospectus, adding that 96% of last year’s revenues came from three main clients—two of which are Meituan and Ele.me.

Per F&S stats cited in the prospectus, China’s on-demand consumer service market, in terms of gross transaction value, is expected to reach RMB 9,482.2 billion (USD 1,354.83 billion) by 2024 at a compound annual growth rate of 15.4% from 2019 to 2024.

However, the company has failed to become profitable. It recorded a net loss of RMB 14.0 million (USD 2 million), RMB 44.3 million (USD 6.33) and RMB 13.4 million (USD 1.9 million) in 2017, 2018 and 2019, respectively. For the first quarter of this year, its gross profit decreased by 52.4%  year-on-year to RMB 11.1 million (USD 1.6 million).