A Chinese video-streaming service raised $775 million through a Nasdaq listing, capitalizing on the growing popularity of watching others play games on the internet.
The initial public offering by DouYu International Holdings Ltd. was the biggest this year by a Chinese company in the U.S., ahead of the $645 million IPO of cafe chain
DouYu offers both desktop and mobile apps, and counts China’s
and Amazon.com Inc.’s Twitch among its peers.
DouYu, which is backed by Chinese internet heavyweight
, sold 67.39 million American depositary shares at $11.50 apiece, at the bottom of an indicative price range of $11.50 to $14.00 a share, it said in a statement. Its shares will start trading on Wednesday.
The IPO values the company at nearly $4 billion, including restricted shares issued to employees under a share-based compensation program.
China’s esports industry is the world’s largest by revenue and number of gamers, according to iResearch. Last year some 683 million people, or roughly half the country’s population, played games on phones, computers or game consoles. The market-research firm forecasts that number will reach 878 million—or nearly a third of videogamers globally—in 2023.
Rival Huya’s shares have more than doubled since it listed on the New York Stock Exchange in May 2018.
After three consecutive years of net losses, DouYu swung to a net profit of $2.7 million for the three months ended March. The number of average monthly active users accessing its live-streaming platforms via personal computers and smartphones stood at 159 million in the first quarter, up more than 25% from a year earlier.
About two-thirds of the money raised came from selling new shares, and the company plans to invest the proceeds in content, marketing and research and development. The rest of the stock came from existing shareholders selling down their holdings, including Zhang Wenming, the company’s co-chief executive and co-founder.
Tencent will remain the single largest shareholder after the IPO, with a 37.2% stake, DouYu’s prospectus shows. This figure is before any potential dilution caused by employee stock plans.
& Co. LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch and CMB International Capital Ltd. were joint bookrunners.
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